Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS,
as Secretary of Foreign Affairs, and CATALINO MACARAIG, as Executive
Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUST
CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as
members of the PRINCIPAL AND BIDDING COMMITTEES ON THE
UTILIZATION/DISPOSITION PETITION OF PHILIPPINE GOVERNMENT
PROPERTIES IN JAPAN, respondents.
Arturo M. Tolentino for petitioner in 92013.

GUTIERREZ, JR., J.:

These are two petitions for prohibition seeking to enjoin respondents, their representatives and agents from proceeding with the
bidding for the sale of the 3,179 square meters of land at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on February
21, 1990. We granted the prayer for a temporary restraining order effective February 20, 1990. One of the petitioners (in G.R. No.
92047) likewise prayes for a writ of mandamus to compel the respondents to fully disclose to the public the basis of their decision
to push through with the sale of the Roppongi property inspire of strong public opposition and to explain the proceedings which
effectively prevent the participation of Filipino citizens and entities in the bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on March 13, 1990. After G.R. No. 92047,
Ojeda v. Secretary Macaraig, et al. was filed, the respondents were required to file a comment by the Court's resolution dated
February 22, 1990. The two petitions were consolidated on March 27, 1990 when the memoranda of the parties in the Laurel case
were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a motion for an extension of thirty (30) days to
file comment in G.R. No. 92047, followed by a second motion for an extension of another thirty (30) days which we granted on May
8, 1990, a third motion for extension of time granted on May 24, 1990 and a fourth motion for extension of time which we granted
on June 5, 1990 but calling the attention of the respondents to the length of time the petitions have been pending. After the
comment was filed, the petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and resolved to
decide the two (2) cases.
I
The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the
Reparations Agreement entered into with Japan on May 9, 1956, the other lots being:

(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area of approximately 2,489.96 square
meters, and is at present the site of the Philippine Embassy Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72 square meters and categorized as a
commercial lot now being used as a warehouse and parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a residential lot which is now vacant.
The properties and the capital goods and services procured from the Japanese government for national development projects are
part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at $550 million would be payable in twenty (20) years in accordance
with annual schedules of procurements to be fixed by the Philippine and Japanese governments (Article 2, Reparations
Agreement). Rep. Act No. 1789, the Reparations Law, prescribes the national policy on procurement and utilization of reparations
and development loans. The procurements are divided into those for use by the government sector and those for private parties in
projects as the then National Economic Council shall determine. Those intended for the private sector shall be made available by
sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities in national development projects.
The Roppongi property was acquired from the Japanese government under the Second Year Schedule and listed under the
heading "Government Sector", through Reparations Contract No. 300 dated June 27, 1958. The Roppongi property consists of the
land and building "for the Chancery of the Philippine Embassy" (Annex M-D to Memorandum for Petitioner, p. 503). As intended, it
became the site of the Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976 when the Roppongi
building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has
remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to Japan, Carlos J. Valdez, to make
the property the subject of a lease agreement with a Japanese firm - Kajima Corporation which shall construct two (2) buildings
in Roppongi and one (1) building in Nampeidai and renovate the present Philippine Chancery in Nampeidai. The consideration of
the construction would be the lease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi and the
two (2) buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine Embassy Chancery. At the end
of the lease period, all the three leased buildings shall be occupied and used by the Philippine government. No change of
ownership or title shall occur. (See Annex "B" to Reply to Comment) The Philippine government retains the title all throughout the
lease period and thereafter. However, the government has not acted favorably on this proposal which is pending approval and
ratification between the parties. Instead, on August 11, 1986, President Aquino created a committee to study the
disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan through Administrative Order No. 3, followed
by Administrative Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities to avail of separations'
capital goods and services in the event of sale, lease or disposition. The four properties in Japan including the Roppongi were
specifically mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to
sell the reparations properties starting with the Roppongi lot. The property has twice been set for bidding at a minimum floor price
of $225 million. The first bidding was a failure since only one bidder qualified. The second one, after postponements, has not yet
materialized. The last scheduled bidding on February 21, 1990 was restrained by his Court. Later, the rules on bidding were
changed such that the $225 million floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No. 92013 objects to the alienation of
the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds as a principal objection the alleged unjustified bias of
the Philippine government in favor of selling the property to non-Filipino citizens and entities. These petitions have been
consolidated and are resolved at the same time for the objective is the same - to stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the government to alienate the Roppongi
property assails the constitutionality of Executive Order No. 296 in making the property available for sale to non-Filipino citizens
and entities. He also questions the bidding procedures of the Committee on the Utilization or Disposition of Philippine Government
Properties in Japan for being discriminatory against Filipino citizens and Filipino-owned entities by denying them the right to be
informed about the bidding requirements.
II

In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots were acquired as part of the reparations
from the Japanese government for diplomatic and consular use by the Philippine government. Vice-President Laurel states that the
Roppongi property is classified as one of public dominion, and not of private ownership under Article 420 of the Civil Code (See
infra).
The petitioner submits that the Roppongi property comes under "property intended for public service" in paragraph 2 of the above
provision. He states that being one of public dominion, no ownership by any one can attach to it, not even by the State. The
Roppongi and related properties were acquired for "sites for chancery, diplomatic, and consular quarters, buildings and other
improvements" (Second Year Reparations Schedule). The petitioner states that they continue to be intended for a necessary
service. They are held by the State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated,
is outside the commerce of man, or to put it in more simple terms, it cannot be alienated nor be the subject matter of contracts
(Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-use of the Roppongi property at the moment, the
petitioner avers that the same remains property of public dominion so long as the government has not used it for other purposes
nor adopted any measure constituting a removal of its original purpose or use.
The respondents, for their part, refute the petitioner's contention by saying that the subject property is not governed by our Civil
Code but by the laws of Japan where the property is located. They rely upon the rule of lex situs which is used in determining the
applicable law regarding the acquisition, transfer and devolution of the title to a property. They also invoke Opinion No. 21, Series
of 1988, dated January 27, 1988 of the Secretary of Justice which used the lex situs in explaining the inapplicability of Philippine
law regarding a property situated in Japan.
The respondents add that even assuming for the sake of argument that the Civil Code is applicable, the Roppongi property has
ceased to become property of public dominion. It has become patrimonial property because it has not been used for public service
or for diplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and because the intention by the
Executive Department and the Congress to convert it to private use has been manifested by overt acts, such as, among others: (1)
the transfer of the Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility of alienating the
four government properties in Japan; (3) the issuance of Executive Order No. 296; (4) the enactment by the Congress of Rep. Act
No. 6657 [the Comprehensive Agrarian Reform Law] on June 10, 1988 which contains a provision stating that funds may be taken
from the sale of Philippine properties in foreign countries; (5) the holding of the public bidding of the Roppongi property but which
failed; (6) the deferment by the Senate in Resolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate
of the government's intention to remove the Roppongi property from the public service purpose; and (7) the resolution of this
Court dismissing the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which sought to enjoin the second bidding of
the Roppongi property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality of Executive Order No. 296. He had
earlier filed a petition in G.R. No. 87478 which the Court dismissed on August 1, 1989. He now avers that the executive order
contravenes the constitutional mandate to conserve and develop the national patrimony stated in the Preamble of the 1987
Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable lands of the public domain to Filipino citizens. (Sections 2 and 3,
Article XII, Constitution; Sections 22 and 23 of Commonwealth Act 141).itc-asl
(2) The preference for Filipino citizens in the grant of rights, privileges and concessions covering the national economy and
patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair competition and trade practices;
(4) The guarantee of the right of the people to information on all matters of public concern (Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by Filipino citizens of capital goods
received by the Philippines under the Reparations Act (Sections 2 and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of all transactions involving public interest (Section 28, Article III,
Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional executive order is a misapplication of
public funds He states that since the details of the bidding for the Roppongi property were never publicly disclosed until February
15, 1990 (or a few days before the scheduled bidding), the bidding guidelines are available only in Tokyo, and the accomplishment
of requirements and the selection of qualified bidders should be done in Tokyo, interested Filipino citizens or entities owned by
them did not have the chance to comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall be sold
for a minimum price of $225 million from which price capital gains tax under Japanese law of about 50 to 70% of the floor price
would still be deducted.
IV

The petitioners and respondents in both cases do not dispute the fact that the Roppongi site and the three related properties were
through reparations agreements, that these were assigned to the government sector and that the Roppongi property itself was
specifically designated under the Reparations Agreement to house the Philippine Embassy.
The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated by the terms of the Reparations
Agreement and the corresponding contract of procurement which bind both the Philippine government and the Japanese
government.
There can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial. This,
the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special
collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social
group. The purpose is not to serve the State as a juridical person, but the citizens; it is intended for the common and public welfare
and cannot be the object of appropration. (Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of the
Philippines, 1963 Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks shores roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public service or
for the development of the national wealth.
ART. 421. All other property of the State, which is not of the character stated in the preceding article, is
patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property belonging to the State
and intended for some public service.
Has the intention of the government regarding the use of the property been changed because the lot has been Idle for some years?
Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene
Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the public domain, not available for private appropriation
or ownership until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of
Lands, 108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by concerned public officials insinuating a change of intention. We
emphasize, however, that an abandonment of the intention to use the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be definite Abandonment cannot be inferred from the non-use alone
specially if the non-use was attributable not to the government's own deliberate and indubitable will but to a lack of financial
support to repair and improve the property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must be a
certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the Roppongi property's original purpose.
Even the failure by the government to repair the building in Roppongi is not abandonment since as earlier stated, there simply was
a shortage of government funds. The recent Administrative Orders authorizing a study of the status and conditions of government
properties in Japan were merely directives for investigation but did not in any way signify a clear intention to dispose of the
properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a provision in its text expressly authorizing
the sale of the four properties procured from Japan for the government sector. The executive order does not declare that the
properties lost their public character. It merely intends to make the properties available to foreigners and not to Filipinos alone in
case of a sale, lease or other disposition. It merely eliminates the restriction under Rep. Act No. 1789 that reparations goods may
be sold only to Filipino citizens and one hundred (100%) percent Filipino-owned entities. The text of Executive Order No. 296
provides:

Section 1. The provisions of Republic Act No. 1789, as amended, and of other laws to the contrary
notwithstanding, the above-mentioned properties can be made available for sale, lease or any other manner of
disposition to non-Filipino citizens or to entities owned by non-Filipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and the three other properties were
earlier converted into alienable real properties. As earlier stated, Rep. Act No. 1789 differentiates the procurements for the
government sector and the private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private sector properties can be sold to
end-users who must be Filipinos or entities owned by Filipinos. It is this nationality provision which was amended by Executive
Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources of funds for its implementation, the
proceeds of the disposition of the properties of the Government in foreign countries, did not withdraw the Roppongi property from
being classified as one of public dominion when it mentions Philippine properties abroad. Section 63 (c) refers to properties which
are alienable and not to those reserved for public use or service. Rep Act No. 6657, therefore, does not authorize the Executive
Department to sell the Roppongi property. It merely enumerates possible sources of future funding to augment (as and when
needed) the Agrarian Reform Fund created under Executive Order No. 299. Obviously any property outside of the commerce of
man cannot be tapped as a source of funds.
The respondents try to get around the public dominion character of the Roppongi property by insisting that Japanese law and not
our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the ones to insist that in the sale of extremely
valuable government property, Japanese law and not Philippine law should prevail. The Japanese law - its coverage and effects,
when enacted, and exceptions to its provision is not presented to the Court It is simply asserted that the lex loci rei sitae or
Japanese law should apply without stating what that law provides. It is a ed on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises
only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a
conveyance, are to be determined (See Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land
ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which
law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines.
The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The
opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the
authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law
which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public
domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or not this
opinion is correct. Why should we discuss who can acquire the Roppongi lot when there is no showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the recommendation by the investigating committee to sell
the Roppongi property was premature or, at the very least, conditioned on a valid change in the public character of the Roppongi
property. Moreover, the approval does not have the force and effect of law since the President already lost her legislative powers.
The Congress had already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of public dominion, there is another obstacle
to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is a party. In cases in which the
Government of the Republic of the Philippines is a party to any deed or other instrument conveying the title to
real estate or to any other property the value of which is in excess of one hundred thousand pesos, the
respective Department Secretary shall prepare the necessary papers which, together with the proper
recommendations, shall be submitted to the Congress of the Philippines for approval by the same. Such deed,
instrument, or contract shall be executed and signed by the President of the Philippines on behalf of the
Government of the Philippines unless the Government of the Philippines unless the authority therefor be
expressly vested by law in another officer. (Emphasis supplied)

The requirement has been retained in Section 48, Book I of the Administrative Code of 1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is
authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by
the following:
(1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless
the authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision
or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or her own sole will. Any such conveyance
must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of the Roppongi property does not
withdraw the property from public domain much less authorize its sale. It is a mere resolution; it is not a formal declaration
abandoning the public character of the Roppongi property. In fact, the Senate Committee on Foreign Relations is conducting
hearings on Senate Resolution No. 734 which raises serious policy considerations and calls for a fact-finding investigation of the
circumstances behind the decision to sell the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon the constitutionality of Executive Order
No. 296. Contrary to respondents' assertion, we did not uphold the authority of the President to sell the Roppongi property. The
Court stated that the constitutionality of the executive order was not the real issue and that resolving the constitutional question
was "neither necessary nor finally determinative of the case." The Court noted that "[W]hat petitioner ultimately questions is the
use of the proceeds of the disposition of the Roppongi property." In emphasizing that "the decision of the Executive to dispose of
the Roppongi property to finance the CARP ... cannot be questioned" in view of Section 63 (c) of Rep. Act No. 6657, the Court did
not acknowledge the fact that the property became alienable nor did it indicate that the President was authorized to dispose of the
Roppongi property. The resolution should be read to mean that in case the Roppongi property is re-classified to be patrimonial and
alienable by authority of law, the proceeds of a sale may be used for national economic development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed 1990 sale of the Roppongi property.
We are resolving the issues raised in these petitions, not the issues raised in 1989.
Having declared a need for a law or formal declaration to withdraw the Roppongi property from public domain to make it alienable
and a need for legislative authority to allow the sale of the property, we see no compelling reason to tackle the constitutional
issues raised by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions are properly raised in appropriate cases
and their resolution is necessary for the determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon
a constitutional question although properly presented by the record if the case can be disposed of on some other ground such as
the application of a statute or general law (Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v.
Pullman Co., 312 U.S. 496 [1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was given to the Filipino people in reparation
for the lives and blood of Filipinos who died and suffered during the Japanese military occupation, for the
suffering of widows and orphans who lost their loved ones and kindred, for the homes and other properties
lost by countless Filipinos during the war. The Tokyo properties are a monument to the bravery and sacrifice
of the Filipino people in the face of an invader; like the monuments of Rizal, Quezon, and other Filipino heroes,
we do not expect economic or financial benefits from them. But who would think of selling these monuments?
Filipino honor and national dignity dictate that we keep our properties in Japan as memorials to the countless
Filipinos who died and suffered. Even if we should become paupers we should not think of selling them. For it
would be as if we sold the lives and blood and tears of our countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese government in atonement for its past
belligerence for the valiant sacrifice of life and limb and for deaths, physical dislocation and economic
devastation the whole Filipino people endured in World War II.
It is for what it stands for, and for what it could never bring back to life, that its significance today remains
undimmed, inspire of the lapse of 45 years since the war ended, inspire of the passage of 32 years since the
property passed on to the Philippine government.

Roppongi is a reminder that cannot should not be dissipated ... (Rollo-92047, p. 9)

It is indeed true that the Roppongi property is valuable not so much because of the inflated prices fetched by real property in
Tokyo but more so because of its symbolic value to all Filipinos veterans and civilians alike. Whether or not the Roppongi and
related properties will eventually be sold is a policy determination where both the President and Congress must concur.
Considering the properties' importance and value, the laws on conversion and disposition of property of public dominion must be
faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is issued enjoining the respondents
from proceeding with the sale of the Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is
made PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, Grio-Aquino and Regalado, JJ., concur.

Separate Opinions

CRUZ, J., concurring:

I concur completely with the excellent ponencia of Mr.
Justice Gutierrez and will add the following
observations only for emphasis.
It is clear that the respondents have failed to show the
President's legal authority to sell the Roppongi
property. When asked to do so at the hearing on these
petitions, the Solicitor General was at best
ambiguous, although I must add in fairness that this
was not his fault. The fact is that there is -no such
authority. Legal expertise alone cannot conjure that
statutory permission out of thin air.
Exec. Order No. 296, which reads like so much
legislative, double talk, does not contain such
authority. Neither does Rep. Act No. 6657, which

simply allows the proceeds of the sale of our

properties abroad to be used for the comprehensive
agrarian reform program. Senate Res. No. 55 was a
mere request for the deferment of the scheduled sale
of tile Roppongi property, possibly to stop the
transaction altogether; and ill any case it is not a law.
The sale of the said property may be authorized only
by Congress through a duly enacted statute, and there
is no such law.
Once again, we have affirmed the principle that ours is
a government of laws and not of men, where every
public official, from the lowest to the highest, can act
only by virtue of a valid authorization. I am happy to
note that in the several cases where this Court has
ruled against her, the President of the Philippines has
submitted to this principle with becoming grace.

PADILLA, J., concurring:

I concur in the decision penned by Mr. Justice
Gutierrez, Jr., I only wish to make a few observations
which could help in further clarifying the issues.
Under our tripartite system of government ordained
by the Constitution, it is Congress that lays down or
determines policies. The President executes such
policies. The policies determined by Congress are
embodied in legislative enactments that have to be
approved by the President to become law. The

President, of course, recommends to Congress the

approval of policies but, in the final analysis, it is
Congress that is the policy - determining branch of
government.
The judiciary interprets the laws and, in appropriate
cases, determines whether the laws enacted by
Congress and approved by the President, and
presidential acts implementing such laws, are in
accordance with the Constitution.
The Roppongi property was acquired by the Philippine
government pursuant to the reparations agreement
between the Philippine and Japanese governments.
Under such agreement, this property was acquired by
the Philippine government for a specific purpose,
namely, to serve as the site of the Philippine Embassy
in Tokyo, Japan. Consequently, Roppongi is a
property of public dominion and intended for public
service, squarely falling within that class of property
under Art. 420 of the Civil Code, which provides:
Art. 420. The following things are property of
public dominion :
(1) ...
(2) Those which belong to the State, without
being for public use, and are intended for
some public service or for the development of
the national wealth. (339a)

Public dominion property intended for public service

cannot be alienated unless the property is first
transformed into private property of the state
otherwise known as patrimonial property of the state.

The transformation of public dominion property to state patrimonial property involves, to my

mind, a policy decision. It is a policy decision because the treatment of the property varies
according to its classification. Consequently, it is Congress which can decide and declare the
conversion of Roppongi from a public dominion property to a state patrimonial property.
Congress has made no such decision or declaration.
Moreover, the sale of public property (once converted from public dominion to state patrimonial
property) must be approved by Congress, for this again is a matter of policy (i.e. to keep or
dispose of the property). Sec. 48, Book 1 of the Administrative Code of 1987 provides:
SEC. 48. Official Authorized to Convey Real Property. Whenever real property of
the Government is authorized by law to be conveyed, the deed of conveyance shall
be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic
of the Philippines, by the President, unless the authority therefor is
expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)
But the record is bare of any congressional decision or approval to sell Roppongi. The record is
likewise bare of any congressional authority extended to the President to sell Roppongi thru
public bidding or otherwise.
It is therefore, clear that the President cannot sell or order the sale of Roppongi thru public
bidding or otherwise without a prior congressional approval, first, converting Roppongi from a
public dominion property to a state patrimonial property, and, second, authorizing the President
to sell the same.
ACCORDINGLY, my vote is to GRANT the petition and to make PERMANENT the temporary
restraining order earlier issued by this Court.

SARMIENTO, J., concurring:

The central question, as I see it, is whether or not the so-called "Roppongi property' has lost its
nature as property of public dominion, and hence, has become patrimonial property of the State. I
understand that the parties are agreed that it was property intended for "public service" within the
contemplation of paragraph (2), of Article 430, of the Civil Code, and accordingly, land of State
dominion, and beyond human commerce. The lone issue is, in the light of supervening
developments, that is non-user thereof by the National Government (for diplomatic purposes) for
the last thirteen years; the issuance of Executive Order No. 296 making it available for sale to any

interested buyer; the promulgation of Republic Act No. 6657, the Comprehensive Agrarian Reform
Law, making available for the program's financing, State assets sold; the approval by the
President of the recommendation of the investigating committee formed to study the property's
utilization; and the issuance of Resolution No. 55 of the Philippine Senate requesting for the
deferment of its disposition it, "Roppongi", is still property of the public dominion, and if it is not,
how it lost that character.
When land of the public dominion ceases to be one, or when the change takes place, is a question
our courts have debated early. In a 1906 decision, 1 it was held that property of the public
dominion, a public plaza in this instance, becomes patrimonial upon use thereof for purposes
other than a plaza. In a later case, 2 this ruling was reiterated. Likewise, it has been held that land,
originally private property, has become of public dominion upon its donation to the town and its
conversion and use as a public plaza. 3 It is notable that under these three cases, the character of
the property, and any change occurring therein, depends on the actual use to which it is
dedicated. 4
Much later, however, the Court held that "until a formal declaration on the part of the Government,
through the executive department or the Legislative, to the effect that the land . . . is no longer
needed for [public] service- for public use or for special industries, [it] continue[s] to be part of
the public [dominion], not available for private expropriation or ownership." 5 So also, it was ruled
that a political subdivision (the City of Cebu in this case) alone may declare (under its charter) a
city road abandoned and thereafter, to dispose of it. 6
In holding that there is "a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a land for legislative authority to allow the sale of the
property" 7 the majority lays stress to the fact that: (1) An affirmative act executive or legislative
is necessary to reclassify property of the public dominion, and (2) a legislative decree is
required to make it alienable. It also clears the uncertainties brought about by earlier
interpretations that the nature of property-whether public or patrimonial is predicated on the
manner it is actually used, or not used, and in the same breath, repudiates the Government's
position that the continuous non-use of "Roppongi", among other arguments, for "diplomatic
purposes", has turned it into State patrimonial property.
I feel that this view corresponds to existing pronouncements of this Court, among other things,
that: (1) Property is presumed to be State property in the absence of any showing to the contrary;
8
(2) With respect to forest lands, the same continue to be lands of the public dominion unless and
until reclassified by the Executive Branch of the Government; 9 and (3) All natural resources,
10
under the Constitution, and subject to exceptional cases, belong to the State.
I am elated that the Court has banished previous uncertainties.

FELICIANO, J., dissenting

With regret, I find myself unable to share the conclusions reached by Mr. Justice Hugo E.
Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land located in 306 Roppongi, 5Chome, Minato-ku Tokyo, Japan (hereinafter referred to as the "Roppongi property") may be
characterized as property of public dominion, within the meaning of Article 420 (2) of the Civil
Code:

[Property] which belong[s] to the State, without being for public use, and are
intended for some public service -.
It might not be amiss however, to note that the appropriateness of trying to bring within the
confines of the simple threefold classification found in Article 420 of the Civil Code ("property for
public use property "intended for some public service" and property intended "for the
development of the national wealth") all property owned by the Republic of the Philippines
whether found within the territorial boundaries of the Republic or located within the territory of
another sovereign State, is not self-evident. The first item of the classification property intended
for public use can scarcely be properly applied to property belonging to the Republic but found
within the territory of another State. The third item of the classification property intended for the
development of the national wealth is illustrated, in Article 339 of the Spanish Civil Code of 1889,
by mines or mineral properties. Again, mineral lands owned by a sovereign State are rarely, if
ever, found within the territorial base of another sovereign State. The task of examining in detail
the applicability of the classification set out in Article 420 of our Civil Code to property that the
Philippines happens to own outside its own boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict of laws that is, at the
present time, before this Court. The issues before us relate essentially to authority to sell the
Roppongi property so far as Philippine law is concerned.
The majority opinion raises two (2) issues: (a) whether or not the Roppongi property has been
converted into patrimonial property or property of the private domain of the State; and (b)
assuming an affirmative answer to (a), whether or not there is legal authority to dispose of the
Roppongi property.
I
Addressing the first issue of conversion of property of public dominion intended for some public
service, into property of the private domain of the Republic, it should be noted that the Civil Code
does not address the question of who has authority to effect such conversion. Neither does the
Civil Code set out or refer to any procedure for such conversion.
Our case law, however, contains some fairly explicit pronouncements on this point, as Justice
Sarmiento has pointed out in his concurring opinion. In Ignacio v. Director of Lands (108 Phils.
335 [1960]), petitioner Ignacio argued that if the land in question formed part of the public domain,
the trial court should have declared the same no longer necessary for public use or public
purposes and which would, therefore, have become disposable and available for private
ownership. Mr. Justice Montemayor, speaking for the Court, said:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is
no longer washed by the waters of the sea and is not necessary for purposes of
public utility, or for the establishment of special industries, or for coast-guard
service, the government shall declare it to be the property of the owners of the
estates adjacent thereto and as an increment thereof. We believe that only the
executive and possibly the legislative departments have the authority and the
power to make the declaration that any land so gained by the sea, is not necessary
for purposes of public utility, or for the establishment of special industries, or for
coast-guard service. If no such declaration has been made by said departments,
the lot in question forms part of the public domain. (Natividad v. Director of Lands,
supra.)

The reason for this pronouncement, according to this Tribunal in the case of
Vicente Joven y Monteverde v. Director of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily called upon, nor indeed in a
position to determine whether any public land are to be used for the purposes
specified in Article 4 of the Law of Waters. Consequently, until a formal declaration
on the part of the Government, through the executive department or the
Legislature, to the effect that the land in question is no longer needed for coastguard service, for public use or for special industries, they continue to be part of
the public domain not available for private appropriation or ownership. (108 Phil. at
338-339; emphasis supplied)
Thus, under Ignacio, either the Executive Department or the Legislative Department may convert
property of the State of public dominion into patrimonial property of the State. No particular
formula or procedure of conversion is specified either in statute law or in case law. Article 422 of
the Civil Code simply states that: "Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial property of the State". I
respectfully submit, therefore, that the only requirement which is legitimately imposable is that
the intent to convert must be reasonably clear from a consideration of the acts or acts of the
Executive Department or of the Legislative Department which are said to have effected such
conversion.
The same legal situation exists in respect of conversion of property of public dominion belonging
to municipal corporations, i.e., local governmental units, into patrimonial property of such
entities. In Cebu Oxygen Acetylene v. Bercilles (66 SCRA 481 [1975]), the City Council of Cebu by
resolution declared a certain portion of an existing street as an abandoned road, "the same not
being included in the city development plan". Subsequently, by another resolution, the City
Council of Cebu authorized the acting City Mayor to sell the land through public bidding. Although
there was no formal and explicit declaration of conversion of property for public use into
patrimonial property, the Supreme Court said:
xxx xxx xxx
(2) Since that portion of the city street subject of petitioner's application for
registration of title was withdrawn from public use, it follows that such withdrawn
portion becomes patrimonial property which can be the object of an ordinary
contract.
Article 422 of the Civil Code expressly provides that "Property of public dominion,
when no longer intended for public use of for public service, shall form part of the
patrimonial property of the State."
Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear
and unequivocal terms, states that "Property thus withdrawn from public servitude
may be used or conveyed for any purpose for which other real property belonging
to the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use and its
subsequent sale to the petitioner is valid. Hence, the petitioner has a registrable
title over the lot in question. (66 SCRA at 484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion, in the case of property owned
by municipal corporations simple non-use or the actual dedication of public property to some use

other than "public use" or some "public service", was sufficient legally to convert such property
into patrimonial property (Municipality of Oas v. Roa, 7 Phil. 20 [1906]- Municipality of Hinunganan
v. Director of Lands 24 Phil. 124 [1913]; Province of Zamboanga del Norte v. City of Zamboanga,
22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of' property of municipal corporations
but also in respect of property of the State itself. Manresa in commenting on Article 341 of the
1889 Spanish Civil Code which has been carried over verbatim into our Civil Code by Article 422
thereof, wrote:
La dificultad mayor en todo esto estriba, naturalmente, en fijar el momento en que
los bienes de dominio publico dejan de serlo. Si la Administracion o la autoridad
competente legislative realizan qun acto en virtud del cual cesa el destino o uso
publico de los bienes de que se trata naturalmente la dificultad queda desde el
primer momento resuelta. Hay un punto de partida cierto para iniciar las relaciones
juridicas a que pudiera haber lugar Pero puede ocurrir que no haya taldeclaracion
expresa, legislativa or administrativa, y, sin embargo, cesar de hecho el destino
publico de los bienes; ahora bien, en este caso, y para los efectos juridicos que
resultan de entrar la cosa en el comercio de los hombres,' se entedera que se ha
verificado la conversion de los bienes patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo Codigo italiano, por la
afirmativa, y por nuestra parte creemos que tal debe ser la soluciion. El destino de
las cosas no depende tanto de una declaracion expresa como del uso publico de
las mismas, y cuanda el uso publico cese con respecto de determinados bienes,
cesa tambien su situacion en el dominio publico. Si una fortaleza en ruina se
abandona y no se repara, si un trozo de la via publica se abandona tambien por
constituir otro nuevo an mejores condiciones....ambos bienes cesan de estar
Codigo, y leyes especiales mas o memos administrativas. (3 Manresa,
Comentarios al Codigo Civil Espanol, p. 128 [7a ed.; 1952) (Emphasis supplied)
The majority opinion says that none of the executive acts pointed to by the Government
purported, expressly or definitely, to convert the Roppongi property into patrimonial property
of the Republic. Assuming that to be the case, it is respectfully submitted that cumulative effect of
the executive acts here involved was to convert property originally intended for and devoted to
public service into patrimonial property of the State, that is, property susceptible of disposition to
and appropration by private persons. These executive acts, in their totality if not each individual
act, make crystal clear the intent of the Executive Department to effect such conversion. These
executive acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created a Committee to study the
disposition/utilization of the Government's property in Japan, The Committee was composed of
officials of the Executive Department: the Executive Secretary; the Philippine Ambassador to
Japan; and representatives of the Department of Foreign Affairs and the Asset Privatization Trust.
On 19 September 1988, the Committee recommended to the President the sale of one of the lots
(the lot specifically in Roppongi) through public bidding. On 4 October 1988, the President
approved the recommendation of the Committee.
On 14 December 1988, the Philippine Government by diplomatic note informed the Japanese
Ministry of Foreign Affairs of the Republic's intention to dispose of the property in Roppongi. The
Japanese Government through its Ministry of Foreign Affairs replied that it interposed no
objection to such disposition by the Republic. Subsequently, the President and the Committee
informed the leaders of the House of Representatives and of the Senate of the Philippines of the
proposed disposition of the Roppongi property.

(b) Executive Order No. 296, which was issued by the President on 25 July 1987. Assuming that
the majority opinion is right in saying that Executive Order No. 296 is insufficient to authorize the
sale of the Roppongi property, it is here submitted with respect that Executive Order No. 296 is
more than sufficient to indicate an intention to convert the property previously devoted to public
service into patrimonial property that is capable of being sold or otherwise disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for diplomatic or for any other public
purposes. Assuming (but only arguendo) that non-use does not, by itself, automatically convert
the property into patrimonial property. I respectfully urge that prolonged non-use, conjoined with
the other factors here listed, was legally effective to convert the lot in Roppongi into patrimonial
property of the State. Actually, as already pointed out, case law involving property of municipal
corporations is to the effect that simple non-use or the actual dedication of public property to
some use other than public use or public service, was sufficient to convert such property into
patrimonial property of the local governmental entity concerned. Also as pointed out above,
Manresa reached the same conclusion in respect of conversion of property of the public domain
of the State into property of the private domain of the State.
The majority opinion states that "abandonment cannot be inferred from the non-use alone
especially if the non-use was attributable not to the Government's own deliberate and indubitable
will but to lack of financial support to repair and improve the property" (Majority Opinion, p. 13).
With respect, it may be stressed that there is no abandonment involved here, certainly no
abandonment of property or of property rights. What is involved is the charge of the classification
of the property from property of the public domain into property of the private domain of the State.
Moreover, if for fourteen (14) years, the Government did not see fit to appropriate whatever funds
were necessary to maintain the property in Roppongi in a condition suitable for diplomatic
representation purposes, such circumstance may, with equal logic, be construed as a
manifestation of the crystalizing intent to change the character of the property.
(d) On 30 March 1989, a public bidding was in fact held by the Executive Department for the sale
of the lot in Roppongi. The circumstance that this bidding was not successful certainly does not
argue against an intent to convert the property involved into property that is disposable by
bidding.
The above set of events and circumstances makes no sense at all if it does not, as a whole, show
at least the intent on the part of the Executive Department (with the knowledge of the Legislative
Department) to convert the property involved into patrimonial property that is susceptible of being
sold.
II
Having reached an affirmative answer in respect of the first issue, it is necessary to address the
second issue of whether or not there exists legal authority for the sale or disposition of the
Roppongi property.
The majority opinion refers to Section 79(f) of the Revised Administrative Code of 1917 which
reads as follows:
SEC. 79 (f). Conveyances and contracts to which the Government is a party. In
cases in which the Government of the Republic of the Philippines is a party to any
deed or other instrument conveying the title to real estate or to any other property
the value of which is in excess of one hundred thousand pesos, the respective
Department Secretary shall prepare the necessary papers which, together with the
proper recommendations, shall be submitted to the Congress of the Philippines for
approval by the same. Such deed, instrument, or contract shall be executed and

signed by the President of the Philippines on behalf of the Government of the

Philippines unless the authority therefor be expressly vested by law in another
officer. (Emphasis supplied)
The majority opinion then goes on to state that: "[T]he requirement has been retained in Section
4, Book I of the Administrative Code of 1987 (Executive Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey Real Property. Whenever real property of
the Government is authorized by law to be conveyed, the deed of conveyance shall
be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name
of any political subdivision or of any corporate agency or instrumentality, by the
executive head of the agency or instrumentality. (Emphasis supplied)
Two points need to be made in this connection. Firstly, the requirement of obtaining specific
approval of Congress when the price of the real property being disposed of is in excess of One
Hundred Thousand Pesos (P100,000.00) under the Revised Administrative Code of 1917, has been
deleted from Section 48 of the 1987 Administrative Code. What Section 48 of the present
Administrative Code refers to is authorization by law for the conveyance. Section 48 does not
purport to be itself a source of legal authority for conveyance of real property of the Government.
For Section 48 merely specifies the official authorized to execute and sign on behalf of the
Government the deed of conveyance in case of such a conveyance.
Secondly, examination of our statute books shows that authorization by law for disposition of real
property of the private domain of the Government, has been granted by Congress both in the form
of (a) a general, standing authorization for disposition of patrimonial property of the Government;
and (b) specific legislation authorizing the disposition of particular pieces of the Government's
patrimonial property.
Standing legislative authority for the disposition of land of the private domain of the Philippines is
provided by Act No. 3038, entitled "An Act Authorizing the Secretary of Agriculture and Natural
Resources to Sell or Lease Land of the Private Domain of the Government of the Philippine
Islands (now Republic of the Philippines)", enacted on 9 March 1922. The full text of this statute is
as follows:
Be it enacted by the Senate and House of Representatives of the Philippines in
Legislature assembled and by the authority of the same:
SECTION 1. The Secretary of Agriculture and Natural Resources (now Secretary of
the Environment and Natural Resources) is hereby authorized to sell or lease land
of the private domain of the Government of the Philippine Islands, or any part
thereof, to such persons, corporations or associations as are, under the provisions
of Act Numbered Twenty-eight hundred and seventy-four, (now Commonwealth
Act No. 141, as amended) known as the Public Land Act, entitled to apply for the
purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the preceding section shall, if such
land is agricultural, be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of said Public Land Act, and if it

be classified differently, in conformity with the provisions of chapter nine of said

Act: Provided, however, That the land necessary for the public service shall be
exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands of the private domain of the
State, it must be noted that Chapter 9 of the old Public Land Act (Act No. 2874) is now Chapter 9 of
the present Public Land Act (Commonwealth Act No. 141, as amended) and that both statutes
refer to: "any tract of land of the public domain which being neither timber nor mineral land, is
intended to be used for residential purposes or for commercial or industrial purposes other than
agricultural" (Emphasis supplied).itc-asl In other words, the statute covers the sale or lease or
residential, commercial or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of the provisions of Act No. 3038.
On 21 December 1954, the then Secretary of Agriculture and Natural Resources promulgated
Lands Administrative Orders Nos. 7-6 and 7-7 which were entitled, respectively: "Supplementary
Regulations Governing the Sale of the Lands of the Private Domain of the Republic of the
Philippines"; and "Supplementary Regulations Governing the Lease of Lands of Private Domain of
the Republic of the Philippines" (text in 51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight (68) years old, is still in effect
and has not been repealed. 1
Specific legislative authorization for disposition of particular patrimonial properties of the State is
illustrated by certain earlier statutes. The first of these was Act No. 1120, enacted on 26 April 1904,
which provided for the disposition of the friar lands, purchased by the Government from the
Roman Catholic Church, to bona fide settlers and occupants thereof or to other persons. In
Jacinto v. Director of Lands (49 Phil. 853 [1926]), these friar lands were held to be private and
patrimonial properties of the State. Act No. 2360, enacted on -28 February 1914, authorized the
sale of the San Lazaro Estate located in the City of Manila, which had also been purchased by the
Government from the Roman Catholic Church. In January 1916, Act No. 2555 amended Act No.
2360 by including therein all lands and buildings owned by the Hospital and the Foundation of
San Lazaro theretofor leased by private persons, and which were also acquired by the Philippine
Government.
After the enactment in 1922 of Act No. 3038, there appears, to my knowledge, to be only one
statute authorizing the President to dispose of a specific piece of property. This statute is
Republic Act No. 905, enacted on 20 June 1953, which authorized the
President to sell an Identified parcel of land of the private domain of the National Government to
the National Press Club of the Philippines, and to other recognized national associations of
professionals with academic standing, for the nominal price of P1.00. It appears relevant to note
that Republic Act No. 905 was not an outright disposition in perpetuity of the property involved- it
provided for reversion of the property to the National Government in case the National Press Club
stopped using it for its headquarters. What Republic Act No. 905 authorized was really a donation,
and not a sale.
The basic submission here made is that Act No. 3038 provides standing legislative authorization
for disposition of the Roppongi property which, in my view, has been converted into patrimonial
property of the Republic. 2

To some, the submission that Act No. 3038 applies not only to lands of the private domain of the
State located in the Philippines but also to patrimonial property found outside the Philippines,
may appear strange or unusual. I respectfully submit that such position is not any more unusual
or strange than the assumption that Article 420 of the Civil Code applies not only to property of
the Republic located within Philippine territory but also to property found outside the boundaries
of the Republic.
It remains to note that under the well-settled doctrine that heads of Executive Departments are
alter egos of the President (Villena v. Secretary of the Interior, 67 Phil. 451 [1939]), and in view of
the constitutional power of control exercised by the President over department heads (Article VII,
Section 17,1987 Constitution), the President herself may carry out the function or duty that is
specifically lodged in the Secretary of the Department of Environment and Natural Resources
(Araneta v. Gatmaitan 101 Phil. 328 [1957]). At the very least, the President retains the power to
approve or disapprove the exercise of that function or duty when done by the Secretary of
Environment and Natural Resources.
It is hardly necessary to add that the foregoing analyses and submissions relate only to the
austere question of existence of legal power or authority. They have nothing to do with much
debated questions of wisdom or propriety or relative desirability either of the proposed
disposition itself or of the proposed utilization of the anticipated proceeds of the property
involved. These latter types of considerations He within the sphere of responsibility of the
political departments of government the Executive and the Legislative authorities.
For all the foregoing, I vote to dismiss the Petitions for Prohibition in both G.R. Nos. 92013 and
92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ., concurring.

Separate Opinions
CRUZ, J., concurring:
I concur completely with the excellent ponencia of Mr. Justice Gutierrez and will add the following observations only for emphasis.
It is clear that the respondents have failed to show the President's legal authority to sell the Roppongi property. When asked to do
so at the hearing on these petitions, the Solicitor General was at best ambiguous, although I must add in fairness that this was not
his fault. The fact is that there is -no such authority. Legal expertise alone cannot conjure that statutory permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double talk, does not contain such authority. Neither does Rep. Act No.
6657, which simply allows the proceeds of the sale of our properties abroad to be used for the comprehensive agrarian reform
program. Senate Res. No. 55 was a mere request for the deferment of the scheduled sale of tile Roppongi property, possibly to
stop the transaction altogether; and ill any case it is not a law. The sale of the said property may be authorized only by Congress
through a duly enacted statute, and there is no such law.
Once again, we have affirmed the principle that ours is a government of laws and not of men, where every public official, from the
lowest to the highest, can act only by virtue of a valid authorization. I am happy to note that in the several cases where this Court
has ruled against her, the President of the Philippines has submitted to this principle with becoming grace.

PADILLA, J., concurring:

I concur in the decision penned by Mr. Justice Gutierrez, Jr., I only wish to make a few observations which could help in further
clarifying the issues.
Under our tripartite system of government ordained by the Constitution, it is Congress that lays down or determines policies. The
President executes such policies. The policies determined by Congress are embodied in legislative enactments that have to be
approved by the President to become law. The President, of course, recommends to Congress the approval of policies but, in the
final analysis, it is Congress that is the policy - determining branch of government.
The judiciary interprets the laws and, in appropriate cases, determines whether the laws enacted by Congress and approved by the
President, and presidential acts implementing such laws, are in accordance with the Constitution.
The Roppongi property was acquired by the Philippine government pursuant to the reparations agreement between the Philippine
and Japanese governments. Under such agreement, this property was acquired by the Philippine government for a specific
purpose, namely, to serve as the site of the Philippine Embassy in Tokyo, Japan. Consequently, Roppongi is a property of public
dominion and intended for public service, squarely falling within that class of property under Art. 420 of the Civil Code, which
provides:
Art. 420. The following things are property of public dominion :
(1) ...
(2) Those which belong to the State, without being for public use, and are intended for some public service or
for the development of the national wealth. (339a)
Public dominion property intended for public service cannot be alienated unless the property is first transformed into private
1
property of the state otherwise known as patrimonial property of the state. The transformation of public dominion

property to state patrimonial property involves, to my mind, a policy decision. It is a policy

decision because the treatment of the property varies according to its classification.
Consequently, it is Congress which can decide and declare the conversion of Roppongi from a
public dominion property to a state patrimonial property. Congress has made no such decision or
declaration.
Moreover, the sale of public property (once converted from public dominion to state patrimonial
property) must be approved by Congress, for this again is a matter of policy (i.e. to keep or
dispose of the property). Sec. 48, Book 1 of the Administrative Code of 1987 provides:
SEC. 48. Official Authorized to Convey Real Property. Whenever real property of
the Government is authorized by law to be conveyed, the deed of conveyance shall
be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic
of the Philippines, by the President, unless the authority therefor is
expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)
But the record is bare of any congressional decision or approval to sell Roppongi. The record is
likewise bare of any congressional authority extended to the President to sell Roppongi thru
public bidding or otherwise.
It is therefore, clear that the President cannot sell or order the sale of Roppongi thru public
bidding or otherwise without a prior congressional approval, first, converting Roppongi from a
public dominion property to a state patrimonial property, and, second, authorizing the President
to sell the same.

ACCORDINGLY, my vote is to GRANT the petition and to make PERMANENT the temporary
restraining order earlier issued by this Court.

SARMIENTO, J., concurring:

The central question, as I see it, is whether or not the so-called "Roppongi property' has lost its
nature as property of public dominion, and hence, has become patrimonial property of the State. I
understand that the parties are agreed that it was property intended for "public service" within the
contemplation of paragraph (2), of Article 430, of the Civil Code, and accordingly, land of State
dominion, and beyond human commerce. The lone issue is, in the light of supervening
developments, that is non-user thereof by the National Government (for diplomatic purposes) for
the last thirteen years; the issuance of Executive Order No. 296 making it available for sale to any
interested buyer; the promulgation of Republic Act No. 6657, the Comprehensive Agrarian Reform
Law, making available for the program's financing, State assets sold; the approval by the
President of the recommendation of the investigating committee formed to study the property's
utilization; and the issuance of Resolution No. 55 of the Philippine Senate requesting for the
deferment of its disposition it, "Roppongi", is still property of the public dominion, and if it is not,
how it lost that character.
When land of the public dominion ceases to be one, or when the change takes place, is a question
our courts have debated early. In a 1906 decision, 1 it was held that property of the public
dominion, a public plaza in this instance, becomes patrimonial upon use thereof for purposes
other than a plaza. In a later case, 2 this ruling was reiterated. Likewise, it has been held that land,
originally private property, has become of public dominion upon its donation to the town and its
conversion and use as a public plaza. 3 It is notable that under these three cases, the character of
the property, and any change occurring therein, depends on the actual use to which it is
dedicated. 4
Much later, however, the Court held that "until a formal declaration on the part of the Government,
through the executive department or the Legislative, to the effect that the land . . . is no longer
needed for [public] service- for public use or for special industries, [it] continue[s] to be part of
the public [dominion], not available for private expropriation or ownership." 5 So also, it was ruled
that a political subdivision (the City of Cebu in this case) alone may declare (under its charter) a
city road abandoned and thereafter, to dispose of it. 6
In holding that there is "a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a land for legislative authority to allow the sale of the
property" 7 the majority lays stress to the fact that: (1) An affirmative act executive or legislative
is necessary to reclassify property of the public dominion, and (2) a legislative decree is
required to make it alienable. It also clears the uncertainties brought about by earlier
interpretations that the nature of property-whether public or patrimonial is predicated on the
manner it is actually used, or not used, and in the same breath, repudiates the Government's
position that the continuous non-use of "Roppongi", among other arguments, for "diplomatic
purposes", has turned it into State patrimonial property.
I feel that this view corresponds to existing pronouncements of this Court, among other things,
that: (1) Property is presumed to be State property in the absence of any showing to the contrary;
8
(2) With respect to forest lands, the same continue to be lands of the public dominion unless and
until reclassified by the Executive Branch of the Government; 9 and (3) All natural resources,
under the Constitution, and subject to exceptional cases, belong to the State. 10
I am elated that the Court has banished previous uncertainties.

FELICIANO, J., dissenting

With regret, I find myself unable to share the conclusions reached by Mr. Justice Hugo E.
Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land located in 306 Roppongi, 5Chome, Minato-ku Tokyo, Japan (hereinafter referred to as the "Roppongi property") may be
characterized as property of public dominion, within the meaning of Article 420 (2) of the Civil
Code:
[Property] which belong[s] to the State, without being for public use, and are
intended for some public service -.
It might not be amiss however, to note that the appropriateness of trying to bring within the
confines of the simple threefold classification found in Article 420 of the Civil Code ("property for
public use property "intended for some public service" and property intended "for the
development of the national wealth") all property owned by the Republic of the Philippines
whether found within the territorial boundaries of the Republic or located within the territory of
another sovereign State, is not self-evident. The first item of the classification property intended
for public use can scarcely be properly applied to property belonging to the Republic but found
within the territory of another State. The third item of the classification property intended for the
development of the national wealth is illustrated, in Article 339 of the Spanish Civil Code of 1889,
by mines or mineral properties. Again, mineral lands owned by a sovereign State are rarely, if
ever, found within the territorial base of another sovereign State. The task of examining in detail
the applicability of the classification set out in Article 420 of our Civil Code to property that the
Philippines happens to own outside its own boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict of laws that is, at the
present time, before this Court. The issues before us relate essentially to authority to sell the
Roppongi property so far as Philippine law is concerned.
The majority opinion raises two (2) issues: (a) whether or not the Roppongi property has been
converted into patrimonial property or property of the private domain of the State; and (b)
assuming an affirmative answer to (a), whether or not there is legal authority to dispose of the
Roppongi property.
I
Addressing the first issue of conversion of property of public dominion intended for some public
service, into property of the private domain of the Republic, it should be noted that the Civil Code
does not address the question of who has authority to effect such conversion. Neither does the
Civil Code set out or refer to any procedure for such conversion.
Our case law, however, contains some fairly explicit pronouncements on this point, as Justice
Sarmiento has pointed out in his concurring opinion. In Ignacio v. Director of Lands (108 Phils.
335 [1960]), petitioner Ignacio argued that if the land in question formed part of the public domain,
the trial court should have declared the same no longer necessary for public use or public
purposes and which would, therefore, have become disposable and available for private
ownership. Mr. Justice Montemayor, speaking for the Court, said:

Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is
no longer washed by the waters of the sea and is not necessary for purposes of
public utility, or for the establishment of special industries, or for coast-guard
service, the government shall declare it to be the property of the owners of the
estates adjacent thereto and as an increment thereof. We believe that only the
executive and possibly the legislative departments have the authority and the
power to make the declaration that any land so gained by the sea, is not necessary
for purposes of public utility, or for the establishment of special industries, or for
coast-guard service. If no such declaration has been made by said departments,
the lot in question forms part of the public domain. (Natividad v. Director of Lands,
supra.)
The reason for this pronouncement, according to this Tribunal in the case of
Vicente Joven y Monteverde v. Director of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily called upon, nor indeed in a
position to determine whether any public land are to be used for the purposes
specified in Article 4 of the Law of Waters. Consequently, until a formal declaration
on the part of the Government, through the executive department or the
Legislature, to the effect that the land in question is no longer needed for coastguard service, for public use or for special industries, they continue to be part of
the public domain not available for private appropriation or ownership. (108 Phil. at
338-339; emphasis supplied)
Thus, under Ignacio, either the Executive Department or the Legislative Department may convert
property of the State of public dominion into patrimonial property of the State. No particular
formula or procedure of conversion is specified either in statute law or in case law. Article 422 of
the Civil Code simply states that: "Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial property of the State". I
respectfully submit, therefore, that the only requirement which is legitimately imposable is that
the intent to convert must be reasonably clear from a consideration of the acts or acts of the
Executive Department or of the Legislative Department which are said to have effected such
conversion.
The same legal situation exists in respect of conversion of property of public dominion belonging
to municipal corporations, i.e., local governmental units, into patrimonial property of such
entities. In Cebu Oxygen Acetylene v. Bercilles (66 SCRA 481 [1975]), the City Council of Cebu by
resolution declared a certain portion of an existing street as an abandoned road, "the same not
being included in the city development plan". Subsequently, by another resolution, the City
Council of Cebu authorized the acting City Mayor to sell the land through public bidding. Although
there was no formal and explicit declaration of conversion of property for public use into
patrimonial property, the Supreme Court said:
xxx xxx xxx
(2) Since that portion of the city street subject of petitioner's application for
registration of title was withdrawn from public use, it follows that such withdrawn
portion becomes patrimonial property which can be the object of an ordinary
contract.
Article 422 of the Civil Code expressly provides that "Property of public dominion,
when no longer intended for public use of for public service, shall form part of the
patrimonial property of the State."

Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear
and unequivocal terms, states that "Property thus withdrawn from public servitude
may be used or conveyed for any purpose for which other real property belonging
to the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use and its
subsequent sale to the petitioner is valid. Hence, the petitioner has a registrable
title over the lot in question. (66 SCRA at 484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion, in the case of property owned
by municipal corporations simple non-use or the actual dedication of public property to some use
other than "public use" or some "public service", was sufficient legally to convert such property
into patrimonial property (Municipality of Oas v. Roa, 7 Phil. 20 [1906]- Municipality of Hinunganan
v. Director of Lands 24 Phil. 124 [1913]; Province of Zamboanga del Norte v. City of Zamboanga,
22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of' property of municipal corporations
but also in respect of property of the State itself. Manresa in commenting on Article 341 of the
1889 Spanish Civil Code which has been carried over verbatim into our Civil Code by Article 422
thereof, wrote:
La dificultad mayor en todo esto estriba, naturalmente, en fijar el momento en que
los bienes de dominio publico dejan de serlo. Si la Administracion o la autoridad
competente legislative realizan qun acto en virtud del cual cesa el destino o uso
publico de los bienes de que se trata naturalmente la dificultad queda desde el
primer momento resuelta. Hay un punto de partida cierto para iniciar las relaciones
juridicas a que pudiera haber lugar Pero puede ocurrir que no haya taldeclaracion
expresa, legislativa or administrativa, y, sin embargo, cesar de hecho el destino
publico de los bienes; ahora bien, en este caso, y para los efectos juridicos que
resultan de entrar la cosa en el comercio de los hombres,' se entedera que se ha
verificado la conversion de los bienes patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo Codigo italiano, por la
afirmativa, y por nuestra parte creemos que tal debe ser la soluciion. El destino de
las cosas no depende tanto de una declaracion expresa como del uso publico de
las mismas, y cuanda el uso publico cese con respecto de determinados bienes,
cesa tambien su situacion en el dominio publico. Si una fortaleza en ruina se
abandona y no se repara, si un trozo de la via publica se abandona tambien por
constituir otro nuevo an mejores condiciones....ambos bienes cesan de estar
Codigo, y leyes especiales mas o memos administrativas. (3 Manresa,
Comentarios al Codigo Civil Espanol, p. 128 [7a ed.; 1952) (Emphasis supplied)
The majority opinion says that none of the executive acts pointed to by the Government
purported, expressly or definitely, to convert the Roppongi property into patrimonial property
of the Republic. Assuming that to be the case, it is respectfully submitted that cumulative effect of
the executive acts here involved was to convert property originally intended for and devoted to
public service into patrimonial property of the State, that is, property susceptible of disposition to
and appropration by private persons. These executive acts, in their totality if not each individual
act, make crystal clear the intent of the Executive Department to effect such conversion. These
executive acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created a Committee to study the
disposition/utilization of the Government's property in Japan, The Committee was composed of
officials of the Executive Department: the Executive Secretary; the Philippine Ambassador to

Japan; and representatives of the Department of Foreign Affairs and the Asset Privatization Trust.
On 19 September 1988, the Committee recommended to the President the sale of one of the lots
(the lot specifically in Roppongi) through public bidding. On 4 October 1988, the President
approved the recommendation of the Committee.
On 14 December 1988, the Philippine Government by diplomatic note informed the Japanese
Ministry of Foreign Affairs of the Republic's intention to dispose of the property in Roppongi. The
Japanese Government through its Ministry of Foreign Affairs replied that it interposed no
objection to such disposition by the Republic. Subsequently, the President and the Committee
informed the leaders of the House of Representatives and of the Senate of the Philippines of the
proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on 25 July 1987. Assuming that
the majority opinion is right in saying that Executive Order No. 296 is insufficient to authorize the
sale of the Roppongi property, it is here submitted with respect that Executive Order No. 296 is
more than sufficient to indicate an intention to convert the property previously devoted to public
service into patrimonial property that is capable of being sold or otherwise disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for diplomatic or for any other public
purposes. Assuming (but only arguendo) that non-use does not, by itself, automatically convert
the property into patrimonial property. I respectfully urge that prolonged non-use, conjoined with
the other factors here listed, was legally effective to convert the lot in Roppongi into patrimonial
property of the State. Actually, as already pointed out, case law involving property of municipal
corporations is to the effect that simple non-use or the actual dedication of public property to
some use other than public use or public service, was sufficient to convert such property into
patrimonial property of the local governmental entity concerned. Also as pointed out above,
Manresa reached the same conclusion in respect of conversion of property of the public domain
of the State into property of the private domain of the State.
The majority opinion states that "abandonment cannot be inferred from the non-use alone
especially if the non-use was attributable not to the Government's own deliberate and indubitable
will but to lack of financial support to repair and improve the property" (Majority Opinion, p. 13).
With respect, it may be stressed that there is no abandonment involved here, certainly no
abandonment of property or of property rights. What is involved is the charge of the classification
of the property from property of the public domain into property of the private domain of the State.
Moreover, if for fourteen (14) years, the Government did not see fit to appropriate whatever funds
were necessary to maintain the property in Roppongi in a condition suitable for diplomatic
representation purposes, such circumstance may, with equal logic, be construed as a
manifestation of the crystalizing intent to change the character of the property.
(d) On 30 March 1989, a public bidding was in fact held by the Executive Department for the sale
of the lot in Roppongi. The circumstance that this bidding was not successful certainly does not
argue against an intent to convert the property involved into property that is disposable by
bidding.
The above set of events and circumstances makes no sense at all if it does not, as a whole, show
at least the intent on the part of the Executive Department (with the knowledge of the Legislative
Department) to convert the property involved into patrimonial property that is susceptible of being
sold.
II

Having reached an affirmative answer in respect of the first issue, it is necessary to address the
second issue of whether or not there exists legal authority for the sale or disposition of the
Roppongi property.
The majority opinion refers to Section 79(f) of the Revised Administrative Code of 1917 which
reads as follows:
SEC. 79 (f). Conveyances and contracts to which the Government is a party. In
cases in which the Government of the Republic of the Philippines is a party to any
deed or other instrument conveying the title to real estate or to any other property
the value of which is in excess of one hundred thousand pesos, the respective
Department Secretary shall prepare the necessary papers which, together with the
proper recommendations, shall be submitted to the Congress of the Philippines for
approval by the same. Such deed, instrument, or contract shall be executed and
signed by the President of the Philippines on behalf of the Government of the
Philippines unless the authority therefor be expressly vested by law in another
officer. (Emphasis supplied)
The majority opinion then goes on to state that: "[T]he requirement has been retained in Section
4, Book I of the Administrative Code of 1987 (Executive Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey Real Property. Whenever real property of
the Government is authorized by law to be conveyed, the deed of conveyance shall
be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name
of any political subdivision or of any corporate agency or instrumentality, by the
executive head of the agency or instrumentality. (Emphasis supplied)
Two points need to be made in this connection. Firstly, the requirement of obtaining specific
approval of Congress when the price of the real property being disposed of is in excess of One
Hundred Thousand Pesos (P100,000.00) under the Revised Administrative Code of 1917, has been
deleted from Section 48 of the 1987 Administrative Code. What Section 48 of the present
Administrative Code refers to is authorization by law for the conveyance. Section 48 does not
purport to be itself a source of legal authority for conveyance of real property of the Government.
For Section 48 merely specifies the official authorized to execute and sign on behalf of the
Government the deed of conveyance in case of such a conveyance.
Secondly, examination of our statute books shows that authorization by law for disposition of real
property of the private domain of the Government, has been granted by Congress both in the form
of (a) a general, standing authorization for disposition of patrimonial property of the Government;
and (b) specific legislation authorizing the disposition of particular pieces of the Government's
patrimonial property.
Standing legislative authority for the disposition of land of the private domain of the Philippines is
provided by Act No. 3038, entitled "An Act Authorizing the Secretary of Agriculture and Natural
Resources to Sell or Lease Land of the Private Domain of the Government of the Philippine
Islands (now Republic of the Philippines)", enacted on 9 March 1922. The full text of this statute is
as follows:

Be it enacted by the Senate and House of Representatives of the Philippines in

Legislature assembled and by the authority of the same:
SECTION 1. The Secretary of Agriculture and Natural Resources (now Secretary of
the Environment and Natural Resources) is hereby authorized to sell or lease land
of the private domain of the Government of the Philippine Islands, or any part
thereof, to such persons, corporations or associations as are, under the provisions
of Act Numbered Twenty-eight hundred and seventy-four, (now Commonwealth
Act No. 141, as amended) known as the Public Land Act, entitled to apply for the
purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the preceding section shall, if such
land is agricultural, be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of said Public Land Act, and if it
be classified differently, in conformity with the provisions of chapter nine of said
Act: Provided, however, That the land necessary for the public service shall be
exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands of the private domain of the
State, it must be noted that Chapter 9 of the old Public Land Act (Act No. 2874) is now Chapter 9 of
the present Public Land Act (Commonwealth Act No. 141, as amended) and that both statutes
refer to: "any tract of land of the public domain which being neither timber nor mineral land, is
intended to be used for residential purposes or for commercial or industrial purposes other than
agricultural" (Emphasis supplied). In other words, the statute covers the sale or lease or
residential, commercial or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of the provisions of Act No. 3038.
On 21 December 1954, the then Secretary of Agriculture and Natural Resources promulgated
Lands Administrative Orders Nos. 7-6 and 7-7 which were entitled, respectively: "Supplementary
Regulations Governing the Sale of the Lands of the Private Domain of the Republic of the
Philippines"; and "Supplementary Regulations Governing the Lease of Lands of Private Domain of
the Republic of the Philippines" (text in 51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight (68) years old, is still in effect
and has not been repealed. 1
Specific legislative authorization for disposition of particular patrimonial properties of the State is
illustrated by certain earlier statutes. The first of these was Act No. 1120, enacted on 26 April 1904,
which provided for the disposition of the friar lands, purchased by the Government from the
Roman Catholic Church, to bona fide settlers and occupants thereof or to other persons. In
Jacinto v. Director of Lands (49 Phil. 853 [1926]), these friar lands were held to be private and
patrimonial properties of the State. Act No. 2360, enacted on -28 February 1914, authorized the
sale of the San Lazaro Estate located in the City of Manila, which had also been purchased by the
Government from the Roman Catholic Church. In January 1916, Act No. 2555 amended Act No.
2360 by including therein all lands and buildings owned by the Hospital and the Foundation of
San Lazaro theretofor leased by private persons, and which were also acquired by the Philippine
Government.

After the enactment in 1922 of Act No. 3038, there appears, to my knowledge, to be only one
statute authorizing the President to dispose of a specific piece of property. This statute is
Republic Act No. 905, enacted on 20 June 1953, which authorized the
President to sell an Identified parcel of land of the private domain of the National Government to
the National Press Club of the Philippines, and to other recognized national associations of
professionals with academic standing, for the nominal price of P1.00. It appears relevant to note
that Republic Act No. 905 was not an outright disposition in perpetuity of the property involved- it
provided for reversion of the property to the National Government in case the National Press Club
stopped using it for its headquarters. What Republic Act No. 905 authorized was really a donation,
and not a sale.
The basic submission here made is that Act No. 3038 provides standing legislative authorization
for disposition of the Roppongi property which, in my view, has been converted into patrimonial
property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands of the private domain of the
State located in the Philippines but also to patrimonial property found outside the Philippines,
may appear strange or unusual. I respectfully submit that such position is not any more unusual
or strange than the assumption that Article 420 of the Civil Code applies not only to property of
the Republic located within Philippine territory but also to property found outside the boundaries
of the Republic.
It remains to note that under the well-settled doctrine that heads of Executive Departments are
alter egos of the President (Villena v. Secretary of the Interior, 67 Phil. 451 [1939]), and in view of
the constitutional power of control exercised by the President over department heads (Article VII,
Section 17,1987 Constitution), the President herself may carry out the function or duty that is
specifically lodged in the Secretary of the Department of Environment and Natural Resources
(Araneta v. Gatmaitan 101 Phil. 328 [1957]). At the very least, the President retains the power to
approve or disapprove the exercise of that function or duty when done by the Secretary of
Environment and Natural Resources.
It is hardly necessary to add that the foregoing analyses and submissions relate only to the
austere question of existence of legal power or authority. They have nothing to do with much
debated questions of wisdom or propriety or relative desirability either of the proposed
disposition itself or of the proposed utilization of the anticipated proceeds of the property
involved. These latter types of considerations He within the sphere of responsibility of the
political departments of government the Executive and the Legislative authorities.
For all the foregoing, I vote to dismiss the Petitions for Prohibition in both G.R. Nos. 92013 and
92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ., concurring.
Footnotes
Padilla, J.
1 Art. 422 of the Civil Code provides:
"Property of public dominion, when no longer intended for public use or public service, shall form part of the
patrimonial property of the State. (341a)
Sarmiento, J.

1 Municipality of Oas v. Roa, 7 Phil. 20 (1906).

2 Municipality of Hinunangan v. Director of Lands, 24 Phil. 124 (11913). The property involved here was a
fortress.
3 Harty v. Municipality of Victoria, 13 Phil. 152 (1909).
4 See also II TOLENTINO, CIVIL CODE OF THE PHILIPPINES 39 (1972 ed.), citing 3 Manresa III. See also
Province of Zamboanga del Norte v. City of Zamboanga, No. L-24440, March 28, 1968, 22 SCRA 1334.
5 Ignacio v. Director of Lands, 108 Phil. 335, 339 (1960).
6 Cebu Oxygen & Acetylene Co., Inc. vs. Bercilles, No. L-40474, August 29, 1975, 66 SCRA 481.
7 G.R. Nos. 92013 & 92047, 21.
8 Salas v. Jarencio, No. L-29788, August 30, 1972, 46 SCRA 734; Rabuco v. Villegas, No.
L-24916, February 28, 1974, 55 SCRA 658.
9 See Lianga Bay Logging Co., Inc. v. Lopez Enage, No. L-30637, July 16, 1987, 152 SCRA 80.
10 CONST., art. XII, sec. 2.
Feliciano, J.
1 We are orally advised by the Office of the Director of Lands that Act No. 3038 is very much in effect and that
the Bureau of Lands continues to date to act under it. See also, in this connection, Sections 2 and 4 of
Republic Act No. 477, enacted 9 June 1950 and as last amended by B.P. Blg 233. This statute government the
disposition of lands of the public domain and of the private domain of the State, including lands previously
vested in the United States Alien Property Custodian and transferred to the Republic of the Philippines.
2 Since Act No. 3038 established certain qualifications for applicants for purchase or lease of land of private
domain of the government, it is relevant to note that Executive Order No. 296, promulgated at a time when the
President was still exercising legislative authority, provides as follows:
"Sec. 1. The provisions of Republic Act No. 1789, as amended, and of other laws, to the contrary
notwithstanding, the above mentioned properties can be made available for sale, lease or any other manner of
disposition to non-Filipino citizens." (Emphasis supplied)

FIRST DIVISION
[G.R. No. 122191. October 8, 1998]
SAUDI ARABIAN AIRLINES, petitioner, vs. COURT OF APPEALS, MILAGROS P.
MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of
Branch 89, Regional Trial Court of Quezon City, respondents.
DECISION
QUISUMBING, J.:

This petition for certiorari pursuant to Rule 45 of the Rules of Court seeks to annul and
set aside the Resolutioni[1] dated September 27, 1995 and the Decision ii[2] dated April
10, 1996 of the Court of Appeals iii[3] in CA-G.R. SP No. 36533, iv[4] and the Ordersv[5]
dated August 29, 1994vi[6] and February 2, 1995vii[7] that were issued by the trial court in
Civil Case No. Q-93-18394.viii[8]
The pertinent antecedent facts which gave rise to the instant petition, as stated in the
questioned Decisionix[9], are as follows:
On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for
its airlines based in Jeddah, Saudi Arabia. x x x
On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a
disco dance with fellow crew members Thamer Al-Gazzawi and Allah AlGazzawi, both Saudi nationals. Because it was almost morning when they
returned to their hotels, they agreed to have breakfast together at the room of
Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly
after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and
several security personnel heard her cries for help and rescued her. Later, the
Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter
as an accomplice.
When plaintiff returned to Jeddah a few days later, several SAUDIA officials
interrogated her about the Jakarta incident. They then requested her to go back
to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA
Legal Officer Sirah Akkad and base manager Baharini negotiated with the police
for the immediate release of the detained crew members but did not succeed
because plaintiff refused to cooperate. She was afraid that she might be tricked
into something she did not want because of her inability to understand the local
dialect. She also declined to sign a blank paper and a document written in the
local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but
barred her from the Jakarta flights.
Plaintiff learned that, through the intercession of the Saudi Arabian government,
the Indonesian authorities agreed to deport Thamer and Allah after two weeks
of detention. Eventually, they were again put in service by defendant SAUDI
(sic). In September 1990, defendant SAUDIA transferred plaintiff to Manila.
On January 14, 1992, just when plaintiff thought that the Jakarta incident was
already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief
Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he
brought her to the police station where the police took her passport and
questioned her about the Jakarta incident. Miniewy simply stood by as the
police put pressure on her to make a statement dropping the case against
Thamer and Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of Jeddah.
One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a few
minutes before the departure of her flight to Manila, plaintiff was not allowed to

board the plane and instead ordered to take a later flight to Jeddah to see Mr.
Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of
the SAUDIA office brought her to a Saudi court where she was asked to sign a
document written in Arabic. They told her that this was necessary to close the
case against Thamer and Allah. As it turned out, plaintiff signed a notice to her
to appear before the court on June 27, 1993. Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah
once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff
did so after receiving assurance from SAUDIAs Manila manager, Aslam
Saleemi, that the investigation was routinary and that it posed no danger to her.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on
June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge
interrogated plaintiff through an interpreter about the Jakarta incident. After one
hour of interrogation, they let her go. At the airport, however, just as her plane
was about to take off, a SAUDIA officer told her that the airline had forbidden
her to take flight. At the Inflight Service Office where she was told to go, the
secretary of Mr. Yahya Saddick took away her passport and told her to remain
in Jeddah, at the crew quarters, until further orders.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court
where the judge, to her astonishment and shock, rendered a decision,
translated to her in English, sentencing her to five months imprisonment and to
286 lashes. Only then did she realize that the Saudi court had tried her,
together with Thamer and Allah, for what happened in Jakarta. The court found
plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the
music in violation of Islamic laws; and (3) socializing with the male crew, in
contravention of Islamic tradition. x[10]
Facing conviction, private respondent sought the help of her employer, petitioner
SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine
Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her
upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah
continued to serve in the international flights.xi[11]
Because she was wrongfully convicted, the Prince of Makkah dismissed the case
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila,xii[12] she was terminated from the service by SAUDIA, without her being informed
of the cause.
On November 23, 1993, Morada filed a Complaint xiii[13] for damages against SAUDIA,
and Khaled Al-Balawi (Al- Balawi), its country manager.
On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss xiv[14] which raised
the following grounds, to wit: (1) that the Complaint states no cause of action against
Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or

demand set forth in the Complaint has been waived, abandoned or otherwise
extinguished; and (4) that the trial court has no jurisdiction to try the case.
On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss) xv[15] Saudia
filed a replyxvi[16] thereto on March 3, 1994.
On June 23, 1994, Morada filed an Amended Complaint xvii[17] wherein Al-Balawi was
dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and
Motion to Dismiss Amended Complaintxviii[18].
The trial court issued an Orderxix[19] dated August 29, 1994 denying the Motion to
Dismiss Amended Complaint filed by Saudia.
From the Order of respondent Judgexx[20] denying the Motion to Dismiss, SAUDIA filed
on September 20, 1994, its Motion for Reconsideration xxi[21] of the Order dated August
29, 1994. It alleged that the trial court has no jurisdiction to hear and try the case on the
basis of Article 21 of the Civil Code, since the proper law applicable is the law of the
Kingdom of Saudi Arabia. On October 14, 1994, Morada filed her Oppositionxxii[22] (To
Defendants Motion for Reconsideration).
In the Replyxxiii[23] filed with the trial court on October 24, 1994, SAUDIA alleged that
since its Motion for Reconsideration raised lack of jurisdiction as its cause of action, the
Omnibus Motion Rule does not apply, even if that ground is raised for the first time on
appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial
interest in the prosecution of the instant case, and hence, without jurisdiction to
adjudicate the same.
Respondent Judge subsequently issued another Order xxiv[24] dated February 2, 1995,
denying SAUDIAs Motion for Reconsideration. The pertinent portion of the assailed
Order reads as follows:
Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines
filed, thru counsel, on September 20, 1994, and the Opposition thereto of the
plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith
of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994,
considering that a perusal of the plaintiffs Amended Complaint, which is one
for the recovery of actual, moral and exemplary damages plus attorneys fees,
upon the basis of the applicable Philippine law, Article 21 of the New Civil Code
of the Philippines, is, clearly, within the jurisdiction of this Court as regards the
subject matter, and there being nothing new of substance which might cause
the reversal or modification of the order sought to be reconsidered, the motion
for reconsideration of the defendant, is DENIED.
SO ORDERED.xxv[25]

Consequently, on February 20, 1995, SAUDIA filed its Petition for Certiorari and
Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary
Restraining Orderxxvi[26] with the Court of Appeals.
Respondent Court of Appeals promulgated a Resolution with Temporary Restraining
Orderxxvii[27] dated February 23, 1995, prohibiting the respondent Judge from further
conducting any proceeding, unless otherwise directed, in the interim.
In another Resolutionxxviii[28] promulgated on September 27, 1995, now assailed, the
appellate court denied SAUDIAs Petition for the Issuance of a Writ of Preliminary
Injunction dated February 18, 1995, to wit:
The Petition for the Issuance of a Writ of Preliminary Injunction is hereby
DENIED, after considering the Answer, with Prayer to Deny Writ of Preliminary
Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein
petitioner is not clearly entitled thereto (Unciano Paramedical College, et. Al., v.
Court of Appeals, et. Al., 100335, April 7, 1993, Second Division).
SO ORDERED.
On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition xxix[29]
for Review with Prayer for Temporary Restraining Order dated October 13, 1995.
However, during the pendency of the instant Petition, respondent Court of Appeals
rendered the Decisionxxx[30] dated April 10, 1996, now also assailed. It ruled that the
Philippines is an appropriate forum considering that the Amended Complaints basis for
recovery of damages is Article 21 of the Civil Code, and thus, clearly within the
jurisdiction of respondent Court. It further held that certiorari is not the proper remedy in
a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to
trial, and in case of an adverse ruling, find recourse in an appeal.
On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for
Temporary Restraining Order xxxi[31] dated April 30, 1996, given due course by this Court.
After both parties submitted their Memoranda,xxxii[32] the instant case is now deemed
submitted for decision.
Petitioner SAUDIA raised the following issues:
I
The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on
Article 21 of the New Civil Code since the proper law applicable is the law of the
Kingdom of Saudi Arabia inasmuch as this case involves what is known in private
international law as a conflicts problem. Otherwise, the Republic of the Philippines will
sit in judgment of the acts done by another sovereign state which is abhorred.
II.

Leave of court before filing a supplemental pleading is not a jurisdictional requirement.

Besides, the matter as to absence of leave of court is now moot and academic when
this Honorable Court required the respondents to comment on petitioners April 30,
1996 Supplemental Petition For Review With Prayer For A Temporary Restraining
Order Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of Court
should be construed with liberality pursuant to Section 2, Rule 1 thereof.
III.
Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO.
36533 entitled Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz, et al. and filed its April
30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining
Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as
provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the
decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this
Honorable Court can take cognizance of this case.xxxiii[33]
From the foregoing factual and procedural antecedents, the following issues emerge for
our resolution:
I.
WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT
THE REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO
HEAR AND TRY CIVIL CASE NO. Q-93-18394 ENTITLED MILAGROS P.
MORADA V. SAUDI ARABIAN AIRLINES.
II.
WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT
IN THE CASE PHILIPPINE LAW SHOULD GOVERN.
Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the
outset. It maintains that private respondents claim for alleged abuse of rights occurred
in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element
qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia,
by virtue of the lex loci delicti commissi rule.xxxiv[34]
On the other hand, private respondent contends that since her Amended Complaint is
based on Articles 19xxxv[35] and 21xxxvi[36] of the Civil Code, then the instant case is
properly a matter of domestic law.xxxvii[37]
Under the factual antecedents obtaining in this case, there is no dispute that the
interplay of events occurred in two states, the Philippines and Saudi Arabia.
As stated by private respondent in her Amended Complaint xxxviii[38] dated June 23, 1994:

2.
Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign
airlines corporation doing business in the Philippines. It may be served with
summons and other court processes at Travel Wide Associated Sales (Phils.),
Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro
Manila.
xxx xxx

xxx

6. Plaintiff learned that, through the intercession of the Saudi Arabian

government, the Indonesian authorities agreed to deport Thamer and Allah
after two weeks of detention. Eventually, they were again put in service by
defendant SAUDIA. In September 1990, defendant SAUDIA transferred
plaintiff to Manila.
7. On January 14, 1992, just when plaintiff thought that the Jakarta incident
was already behind her, her superiors requested her to see MR. Ali Meniewy,
Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him,
he brought her to the police station where the police took her passport and
questioned her about the Jakarta incident. Miniewy simply stood by as the
police put pressure on her to make a statement dropping the case against
Thamer and Allah. Not until she agreed to do so did the police return her
passport and allowed her to catch the afternoon flight out of Jeddah.
8. One year and a half later or on June 16, 1993, in Riyadh, Saudi Arabia, a
few minutes before the departure of her flight to Manila, plaintiff was not
allowed to board the plane and instead ordered to take a later flight to Jeddah
to see Mr. Meniewy, the Chief Legal Officer of SAUDIA. When she did, a
certain Khalid of the SAUDIA office brought her to a Saudi court where she was
asked to sign a document written in Arabic. They told her that this was
necessary to close the case against Thamer and Allah. As it turned out,
plaintiff signed a notice to her to appear before the court on June 27, 1993.
Plaintiff then returned to Manila.
9. Shortly afterwards, defendant SAUDIA summoned plaintiff to report to
Jeddah once again and see Miniewy on June 27, 1993 for further investigation.
Plaintiff did so after receiving assurance from SAUDIAs Manila manager,
Aslam Saleemi, that the investigation was routinary and that it posed no danger
to her.
10.
In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi
court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi
judge interrogated plaintiff through an interpreter about the Jakarta incident.
After one hour of interrogation, they let her go. At the airport, however, just as
her plane was about to take off, a SAUDIA officer told her that the airline had
forbidden her to take that flight. At the Inflight Service Office where she was
told to go, the secretary of Mr. Yahya Saddick took away her passport and told
her to remain in Jeddah, at the crew quarters, until further orders.

11.
On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the
same court where the judge, to her astonishment and shock, rendered a
decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the Saudi court
had tried her, together with Thamer and Allah, for what happened in Jakarta.
The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing, and
listening to the music in violation of Islamic laws; (3) socializing with the male
crew, in contravention of Islamic tradition.
12.
Because SAUDIA refused to lend her a hand in the case, plaintiff
sought the help of the Philippine Embassy in Jeddah. The latter helped her
pursue an appeal from the decision of the court. To pay for her upkeep, she
worked on the domestic flights of defendant SAUDIA while, ironically, Thamer
and Allah freely served the international flights. xxxix[39]
Where the factual antecedents satisfactorily establish the existence of a foreign
element, we agree with petitioner that the problem herein could present a conflicts
case.
A factual situation that cuts across territorial lines and is affected by the diverse laws of
two or more states is said to contain a foreign element. The presence of a foreign
element is inevitable since social and economic affairs of individuals and associations
are rarely confined to the geographic limits of their birth or conception. xl[40]
The forms in which this foreign element may appear are many. xli[41] The foreign element
may simply consist in the fact that one of the parties to a contract is an alien or has a
foreign domicile, or that a contract between nationals of one State involves properties
situated in another State. In other cases, the foreign element may assume a complex
form.xlii[42]
In the instant case, the foreign element consisted in the fact that private respondent
Morada is a resident Philippine national, and that petitioner SAUDIA is a resident
foreign corporation. Also, by virtue of the employment of Morada with the petitioner
Saudia as a flight stewardess, events did transpire during her many occasions of travel
across national borders, particularly from Manila, Philippines to Jeddah, Saudi Arabia,
and vice versa, that caused a conflicts situation to arise.
We thus find private respondents assertion that the case is purely domestic, imprecise.
A conflicts problem presents itself here, and the question of jurisdiction xliii[43] confronts
the court a quo.
After a careful study of the private respondents Amended Complaint,xliv[44] and the
Comment thereon, we note that she aptly predicated her cause of action on Articles 19
and 21 of the New Civil Code.
On one hand, Article 19 of the New Civil Code provides;

Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice give everyone his due and observe
honesty and good faith.
On the other hand, Article 21 of the New Civil Code provides:
Art. 21. Any person who willfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the
latter for damages.
Thus, in Philippine National Bank (PNB) vs. Court of Appeals,xlv[45] this Court held that:
The aforecited provisions on human relations were intended to expand the
concept of torts in this jurisdiction by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for human foresight to
specifically provide in the statutes.
Although Article 19 merely declares a principle of law, Article 21 gives flesh to its
provisions. Thus, we agree with private respondents assertion that violations of Articles
19 and 21 are actionable, with judicially enforceable remedies in the municipal forum.
Based on the allegationsxlvi[46] in the Amended Complaint, read in the light of the Rules
of Court on jurisdictionxlvii[47] we find that the Regional Trial Court (RTC) of Quezon City
possesses jurisdiction over the subject matter of the suit. xlviii[48] Its authority to try and
hear the case is provided for under Section 1 of Republic Act No. 7691, to wit:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the
Judiciary Reorganization Act of 1980, is hereby amended to read as follows:
SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive
jurisdiction:
xxx

xxx

xxx

(8) In all other cases in which demand, exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses, and costs or the value of the property in controversy
exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro
Manila, where the demand, exclusive of the above-mentioned items exceeds Two
hundred Thousand pesos (P200,000.00). (Emphasis ours)
xxx

xxx

xxx

And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue, Quezon
City, is appropriate:
SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]

(a) x x x x x x x x x
(b) Personal actions. All other actions may be commenced and tried where
the defendant or any of the defendants resides or may be found, or where the
plaintiff or any of the plaintiff resides, at the election of the plaintiff.
Pragmatic considerations, including the convenience of the parties, also weigh heavily
in favor of the RTC Quezon City assuming jurisdiction. Paramount is the private interest
of the litigant. Enforceability of a judgment if one is obtained is quite obvious. Relative
advantages and obstacles to a fair trial are equally important. Plaintiff may not, by
choice of an inconvenient forum, vex, harass, or oppress the defendant, e.g. by
inflicting upon him needless expense or disturbance. But unless the balance is strongly
in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed. xlix[49]
Weighing the relative claims of the parties, the court a quo found it best to hear the case
in the Philippines. Had it refused to take cognizance of the case, it would be forcing
plaintiff (private respondent now) to seek remedial action elsewhere, i.e. in the Kingdom
of Saudi Arabia where she no longer maintains substantial connections. That would
have caused a fundamental unfairness to her.
Moreover, by hearing the case in the Philippines no unnecessary difficulties and
inconvenience have been shown by either of the parties. The choice of forum of the
plaintiff (now private respondent) should be upheld.
Similarly, the trial court also possesses jurisdiction over the persons of the parties
herein. By filing her Complaint and Amended Complaint with the trial court, private
respondent has voluntary submitted herself to the jurisdiction of the court.
The records show that petitioner SAUDIA has filed several motions l[50] praying for the
dismissal of Moradas Amended Complaint. SAUDIA also filed an Answer In Ex
Abundante Cautelam dated February 20, 1995. What is very patent and explicit from
the motions filed, is that SAUDIA prayed for other reliefs under the premises.
Undeniably, petitioner SAUDIA has effectively submitted to the trial courts jurisdiction
by praying for the dismissal of the Amended Complaint on grounds other than lack of
jurisdiction.
As held by this Court in Republic vs. Ker and Company, Ltd.:li[51]
We observe that the motion to dismiss filed on April 14, 1962, aside from
disputing the lower courts jurisdiction over defendants person, prayed for
dismissal of the complaint on the ground that plaintiffs cause of action has
prescribed. By interposing such second ground in its motion to dismiss, Ker
and Co., Ltd. availed of an affirmative defense on the basis of which it prayed
the court to resolve controversy in its favor. For the court to validly decide the
said plea of defendant Ker & Co., Ltd., it necessarily had to acquire jurisdiction
upon the latters person, who, being the proponent of the affirmative defense,

should be deemed to have abandoned its special appearance and voluntarily

submitted itself to the jurisdiction of the court.
Similarly, the case of De Midgely vs. Ferandos, held that:
When the appearance is by motion for the purpose of objecting to the
jurisdiction of the court over the person, it must be for the sole and separate
purpose of objecting to the jurisdiction of the court. If his motion is for any other
purpose than to object to the jurisdiction of the court over his person, he
thereby submits himself to the jurisdiction of the court. A special appearance
by motion made for the purpose of objecting to the jurisdiction of the court over
the person will be held to be a general appearance, if the party in said motion
should, for example, ask for a dismissal of the action upon the further ground
that the court had no jurisdiction over the subject matter. lii[52]
Clearly, petitioner had submitted to the jurisdiction of the Regional Trial Court of Quezon
City. Thus, we find that the trial court has jurisdiction over the case and that its exercise
thereof, justified.
As to the choice of applicable law, we note that choice-of-law problems seek to answer
two important questions: (1) What legal system should control a given situation where
some of the significant facts occurred in two or more states; and (2) to what extent
should the chosen legal system regulate the situation. liii[53]
Several theories have been propounded in order to identify the legal system that should
ultimately control. Although ideally, all choice-of-law theories should intrinsically
advance both notions of justice and predictability, they do not always do so. The forum
is then faced with the problem of deciding which of these two important values should
be stressed.liv[54]
Before a choice can be made, it is necessary for us to determine under what category a
certain set of facts or rules fall. This process is known as characterization, or the
doctrine of qualification. It is the process of deciding whether or not the facts relate to
the kind of question specified in a conflicts rule. lv[55] The purpose of characterization
is to enable the forum to select the proper law. lvi[56]
Our starting point of analysis here is not a legal relation, but a factual situation, event, or
operative fact.lvii[57] An essential element of conflict rules is the indication of a test or
connecting factor or point of contact. Choice-of-law rules invariably consist of a
factual relationship (such as property right, contract claim) and a connecting factor or
point of contact, such as the situs of the res, the place of celebration, the place of
performance, or the place of wrongdoing.lviii[58]
Note that one or more circumstances may be present to serve as the possible test for
the determination of the applicable law.lix[59] These test factors or points of contact or
connecting factors could be any of the following:

(1) The nationality of a person, his domicile, his residence, his place of
sojourn, or his origin;
(2) the seat of a legal or juridical person, such as a corporation;
(3) the situs of a thing, that is, the place where a thing is, or is deemed to be
situated. In particular, the lex situs is decisive when real rights are involved;
(4) the place where an act has been done, the locus actus, such as the
place where a contract has been made, a marriage celebrated, a will
signed or a tort committed. The lex loci actus is particularly important in
contracts and torts;
(5) the place where an act is intended to come into effect, e.g., the place of
performance of contractual duties, or the place where a power of attorney is to
be exercised;
(6) the intention of the contracting parties as to the law that should govern their
agreement, the lex loci intentionis;
(7) the place where judicial or administrative proceedings are instituted or done.
The lex forithe law of the forumis particularly important because, as we
have seen earlier, matters of procedure not going to the substance of the
claim involved are governed by it; and because the lex fori applies whenever
the content of the otherwise applicable foreign law is excluded from application
in a given case for the reason that it falls under one of the exceptions to the
applications of foreign law; and
(8) the flag of a ship, which in many cases is decisive of practically all legal
relationships of the ship and of its master or owner as such. It also covers
contractual relationships particularly contracts of affreightment. lx[60]
(Underscoring ours.)
After a careful study of the pleadings on record, including allegations in the Amended
Complaint deemed submitted for purposes of the motion to dismiss, we are convinced
that there is reasonable basis for private respondents assertion that although she was
already working in Manila, petitioner brought her to Jeddah on the pretense that she
would merely testify in an investigation of the charges she made against the two
SAUDIA crew members for the attack on her person while they were in Jakarta. As it
turned out, she was the one made to face trial for very serious charges, including
adultery and violation of Islamic laws and tradition.
There is likewise logical basis on record for the claim that the handing over or turning
over of the person of private respondent to Jeddah officials, petitioner may have acted
beyond its duties as employer. Petitioners purported act contributed to and amplified or
even proximately caused additional humiliation, misery and suffering of private
respondent. Petitioner thereby allegedly facilitated the arrest, detention and prosecution
of private respondent under the guise of petitioners authority as employer, taking
advantage of the trust, confidence and faith she reposed upon it. As purportedly found
by the Prince of Makkah, the alleged conviction and imprisonment of private respondent

was wrongful. But these capped the injury or harm allegedly inflicted upon her person
and reputation, for which petitioner could be liable as claimed, to provide compensation
or redress for the wrongs done, once duly proven.
Considering that the complaint in the court a quo is one involving torts, the connecting
factor or point of contact could be the place or places where the tortious conduct or
lex loci actus occurred. And applying the torts principle in a conflicts case, we find that
the Philippines could be said as a situs of the tort (the place where the alleged tortious
conduct took place). This is because it is in the Philippines where petitioner allegedly
deceived private respondent, a Filipina residing and working here. According to her,
she had honestly believed that petitioner would, in the exercise of its rights and in the
performance of its duties, act with justice, give her her due and observe honesty and
good faith. Instead, petitioner failed to protect her, she claimed. That certain acts or
parts of the injury allegedly occurred in another country is of no moment. For in our
view what is important here is the place where the over-all harm or the fatality of the
alleged injury to the person, reputation, social standing and human rights of
complainant, had lodged, according to the plaintiff below (herein private respondent).
All told, it is not without basis to identify the Philippines as the situs of the alleged tort.
Moreover, with the widespread criticism of the traditional rule of lex loci delicti commissi,
modern theories and rules on tort liabilitylxi[61] have been advanced to offer fresh judicial
approaches to arrive at just results. In keeping abreast with the modern theories on tort
liability, we find here an occasion to apply the State of the most significant relationship
rule, which in our view should be appropriate to apply now, given the factual context of
this case.
In applying said principle to determine the State which has the most significant
relationship, the following contacts are to be taken into account and evaluated
according to their relative importance with respect to the particular issue: (a) the place
where the injury occurred; (b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of
the parties, and (d) the place where the relationship, if any, between the parties is
centered.lxii[62]
As already discussed, there is basis for the claim that over-all injury occurred and
lodged in the Philippines. There is likewise no question that private respondent is a
resident Filipina national, working with petitioner, a resident foreign corporation engaged
here in the business of international air carriage. Thus, the relationship between the
parties was centered here, although it should be stressed that this suit is not based on
mere labor law violations. From the record, the claim that the Philippines has the most
significant contact with the matter in this dispute, lxiii[63] raised by private respondent as
plaintiff below against defendant (herein petitioner), in our view, has been properly
established.
Prescinding from this premise that the Philippines is the situs of the tort complaint of
and the place having the most interest in the problem, we find, by way of

recapitulation, that the Philippine law on tort liability should have paramount application
to and control in the resolution of the legal issues arising out of this case. Further, we
hold that the respondent Regional Trial Court has jurisdiction over the parties and the
subject matter of the complaint; the appropriate venue is in Quezon City, which could
properly apply Philippine law. Moreover, we find untenable petitioners insistence that
[s]ince private respondent instituted this suit, she has the burden of pleading and
proving the applicable Saudi law on the matter. lxiv[64] As aptly said by private
respondent, she has no obligation to plead and prove the law of the Kingdom of Saudi
Arabia since her cause of action is based on Articles 19 and 21 of the Civil Code of the
Philippines. In her Amended Complaint and subsequent pleadings she never alleged
that Saudi law should govern this case.lxv[65] And as correctly held by the respondent
appellate court, considering that it was the petitioner who was invoking the applicability
of the law of Saudi Arabia, thus the burden was on it [petitioner] to plead and to
establish what the law of Saudi Arabia is.lxvi[66]
Lastly, no error could be imputed to the respondent appellate court in upholding the trial
courts denial of defendants (herein petitioners) motion to dismiss the case. Not only
was jurisdiction in order and venue properly laid, but appeal after trial was obviously
available, and the expeditious trial itself indicated by the nature of the case at hand.
Indubitably, the Philippines is the state intimately concerned with the ultimate outcome
of the case below not just for the benefit of all the litigants, but also for the vindication of
the countrys system of law and justice in a transnational setting. With these guidelines
in mind, the trial court must proceed to try and adjudge the case in the light of relevant
Philippine law, with due consideration of the foreign element or elements involved.
Nothing said herein, of course, should be construed as prejudging the results of the
case in any manner whatsoever.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Civil Case No.
Q-93-18394 entitled Milagros P. Morada vs. Saudi Arabia Airlines is hereby
REMANDED to Regional Trial Court of Quezon City, Branch 89 for further proceedings.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Panganiban, JJ., concur.

i[1]

Annex A, PETITION, October 13, 1995, rollo, p. 36.

Annex A, SUPPLEMENTAL PETITION, April 30, 1996, rollo, pp. 88102.

ii[2]

Penned by Associate Justice Bernardo Ll. Salas, and concurred in by

Associate Justice Jorge S. Imperial
and Associate Justice Pacita
Caizares-Nye.
iii[3]

Entitled Saudi Arabian Airlines vs. Hon. Judge Rodolfo A. Ortiz, in his
capacity as Presiding Judge of Branch 89 of the Regional Trial Court of
Quezon City and Milagros P. Morada.
iv[4]

Issued by respondent Judge Hon. Rodolfo A. Ortiz of Branch 89,

Regional Trial Court of Quezon City.
v[5]

vi[6]

Annex B, PETITION, October 13, 1995, rollo, pp. 37-39.

vii[7]

Annex B, PETITION, October 13, 1995, rollo, p. 40.

viii[8]

Entitled Milagros P. Morada vs. Saudi Arabian Airlines.

ix[9]

Supra, note 2.

x[10]

Decision, pp. 2-4; See Rollo, pp. 89-91.

xi[11]

Private respondent's Comment; rollo, p. 50.

xii[12]

Ibid., at pp. 50-51.

Dated November 19, 1993 and docketed as Civil Case No. Q-9318394, Branch 89, Regional Trial Court of Quezon City.
xiii[13]

xiv[14]

Dated January 14, 1994.

xv[15]

Dated February 4, 1994.

xvi[16]

Reply dated March 1, 1994.

xvii[17]

Records, pp. 65-84.

xviii[18]

Rollo, p. 65.

xix[19]

Supra, note 6.

xx[20]

Hon. Rodolfo A. Ortiz.

xxi[21]

Dated September 19, 1994.

xxii[22]

Records, pp. 108-116.

xxiii[23]

Records, pp. 117-128.

xxiv[24]

Supra, note 7.

xxv[25]

Ibid.

xxvi[26]

Dated February 18, 1995; see supra note 4.

xxvii[27]

Supra, note 7.

xxviii[28]

Records, p. 180.

xxix[29]

Rollo, pp. 1-44.

xxx[30]

Supra, note 2.

xxxi[31]

Rollo, pp. 80-86.

Memorandum for Petitioner dated October 9, 1996; rollo, pp. 149180; and Memorandum for Private Respondent, 30 October 1996, rollo, pp.
182-210.
xxxii[32]

xxxiii[33]

Rollo, pp. 157-159. All caps in the original.

xxxiv[34]

Memorandum for Petitioner, p. 14, rollo, p. 162;.

Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
xxxv[35]

Art. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damages.
xxxvi[36]

xxxvii[37]

Memorandum for Private Respondent, p. 9, rollo, p. 190.

xxxviii[38]

Records, pp. 65-71.

xxxix[39]

Supra, note 17, at pp. 65-68.

Salonga, Private International Law, 1995 edition, p. 3.

xl[40]

Ibid., citing Cheshire and North, Private International Law, p. 5 by P.M.

North and J.J. Faucett (Butterworths; London, 1992).
xli[41]

xlii[42]

Ibid.

Paras, Philippine Conflict of Laws, sixth edition (1984), p. 24, citing

Leflar, The Law of Conflict of Laws, pp. 5-6.
xliii[43]

xliv[44]

Supra, note 17.

xlv[45]

83 SCRA 237, 247.

Supra, note at 17, at p. 6. Morada prays that judgment be rendered

against Saudia, ordering it to pay: (1) not less than P250,000.00 as actual
damages; (2) P4 million in moral damages; (3) P500,000.00 in exemplary
damages; and (4) P500,000.00 in attorneys fees.
xlvi[46]

xlvii[47]

Baguioro v. Barrios, 77 Phil. 120.

Jurisdiction over the subject matter is conferred by law and is defined

as the authority of a court to hear and decide cases of the general class to
which the proceedings in question belong. (Reyes v. Diaz, 73 Phil.
484,487)
xlviii[48]

Supra, note 37, p. 58, citing Gulf Oil Corporation v. Gilbert, 350 U.S.
501, 67 Sup. Ct. 839 (1947).
xlix[49]

Omnibus Motion to Dismiss dated January 14, 1994; Reply (to Plaintiffs
Opposition) dated February 19, 1994; Comment (to Plaintiffs Motion to
Admit Amended Complaint dated June 23, 1994) dated July 20, 1994;
Manifestation and Motion to Dismiss Amended Complaint dated June 23,
1994 under date August 11, 1994; and Motion for Reconsideration dated
September 19, 1994.
l[50]

li[51]

18 SCRA 207, 213-214.

lii[52]

64 SCRA 23, 31.

Coquia and Pangalangan, Conflict of Laws, 1995 edition, p. 65, citing

Von Mehren, Recent Trends in Choice-of-Law Methodology, 60 Cornell L.
Rev. 927 (1975).
liii[53]

Ibid.

liv[54]

Supra, note 40 at p. 94, citing Falconbridge, Essays on the Conflict of

Laws, p. 50.
lv[55]

Ibid.

lvi[56]

Supra, note 37, at p. 136; cf. Mussbaum, Principle of Private

International Law, p. 173; and Rabel, The Conflict of Laws: A Comparative
Study, pp. 51-52.
lvii[57]

lviii[58]

Supra, note 37, at p. 137.

lix[59]

Ibid.

lx[60]

Supra, note 37, at pp. 138-139.

Includes the (1) German rule of elective concurrence; (2) State of the
most significant relationship rule (the Second Restatement of 1969); (3)
State interest analysis; and (4) Cavers Principle of Preference.
lxi[61]

lxii[62]

Supra, note 37, p. 396.

Supra, note 59, at p. 79, citing Ruben v. Irving Trust Co., 305 N.Y.
288, 305, 113 N.E. 2d 424, 431.
lxiii[63]

lxiv[64]

Memorandum for Petitioner, p. 22; Rollo, p. 170.

lxv[65]

Memorandum for Private Respondent, pp. 21-22; rollo, pp. 202-203.

lxvi[66]

CA Decision, p. 10; rollo, p. 97.

Republic
SUPREME
Manila

of

the

Philippines
COURT

EN BANC
G.R. No. L-23678

June 6, 1967

TESTATE
ESTATE
OF
AMOS
G.
BELLIS,
deceased.
PEOPLE'S
BANK
and
TRUST
COMPANY,
executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositorsappellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et
al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order
of the Court of First Instance of Manila dated April 30, 1964, approving the
project of partition filed by the executor in Civil Case No. 37089
therein.1wph1.t
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of
the United States." By his first wife, Mary E. Mallen, whom he divorced, he
had five legitimate children: Edward A. Bellis, George Bellis (who predeceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman; by his second wife, Violet Kennedy, who survived him, he had
three legitimate children: Edwin G. Bellis, Walter S. Bellis and Dorothy
Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in
which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided, in
trust, in the following order and manner: (a) $240,000.00 to his first wife,

Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos

Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each
and (c) after the foregoing two items have been satisfied, the remainder
shall go to his seven surviving children by his first and second wives,
namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal
shares.1wph1.t
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San
Antonio, Texas, U.S.A. His will was admitted to probate in the Court of First
Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the
bequests therein including the amount of $240,000.00 in the form of shares
of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective legacies, or a
total of P120,000.00, which it released from time to time according as the
lower court approved and allowed the various motions or petitions filed by
the latter three requesting partial advances on account of their respective
legacies.
On January 8, 1964, preparatory to closing its administration, the executor
submitted and filed its "Executor's Final Account, Report of Administration
and Project of Partition" wherein it reported, inter alia, the satisfaction of the
legacy of Mary E. Mallen by the delivery to her of shares of stock
amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis in the amount of P40,000.00 each
or a total of P120,000.00. In the project of partition, the executor
pursuant to the "Twelfth" clause of the testator's Last Will and Testament
divided the residuary estate into seven equal portions for the benefit of the
testator's seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed
their respective oppositions to the project of partition on the ground that
they were deprived of their legitimes as illegitimate children and, therefore,
compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of

service of which is evidenced by the registry receipt submitted on April 27,
1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling the
oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is
Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the
lower court on June 11, 1964, oppositors-appellants appealed to this Court
to raise the issue of which law must apply Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the
doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L16749, January 31, 1963. Said doctrine is usually pertinent where the
decedent is a national of one country, and a domicile of another. In the
present case, it is not disputed that the decedent was both a national of
Texas and a domicile thereof at the time of his death.2 So that even
assuming Texas has a conflict of law rule providing that the domiciliary
system (law of the domicile) should govern, the same would not result in a
reference back (renvoi) to Philippine law, but would still refer to Texas law.
Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei
sitae) calling for the application of the law of the place where the properties
are situated, renvoi would arise, since the properties here involved are
found in the Philippines. In the absence, however, of proof as to the conflict
of law rule of Texas, it should not be presumed different from ours.3
Appellants' position is therefore not rested on the doctrine of renvoi. As
stated, they never invoked nor even mentioned it in their arguments.
Rather, they argue that their case falls under the circumstances mentioned
in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions, with
regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will; and
(d) the capacity to succeed. They provide that

ART. 16. Real property as well as personal property is subject to the

law of the country where it is situated.
However, intestate and testamentary successions, both with respect
to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is
under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation
of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil
Code, stating that
Prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congress deleted the phrase,
"notwithstanding the provisions of this and the next preceding article" when
they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil
Code, while reproducing without substantial change the second paragraph
of Art. 10 of the old Civil Code as Art. 16 in the new. It must have been their
purpose to make the second paragraph of Art. 16 a specific provision in
itself which must be applied in testate and intestate succession. As further
indication of this legislative intent, Congress added a new provision, under
Art. 1039, which decrees that capacity to succeed is to be governed by the
national law of the decedent.
It is therefore evident that whatever public policy or good customs may be
involved in our System of legitimes, Congress has not intended to extend
the same to the succession of foreign nationals. For it has specifically
chosen to leave, inter alia, the amount of successional rights, to the
decedent's national law. Specific provisions must prevail over general
ones.

Appellants would also point out that the decedent executed two wills one
to govern his Texas estate and the other his Philippine estate arguing
from this that he intended Philippine law to govern his Philippine estate.
Assuming that such was the decedent's intention in executing a separate
Philippine will, it would not alter the law, for as this Court ruled in Miciano v.
Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to the effect that
his properties shall be distributed in accordance with Philippine law and not
with his national law, is illegal and void, for his national law cannot be
ignored in regard to those matters that Article 10 now Article 16 of the
Civil Code states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no
forced heirs or legitimes. Accordingly, since the intrinsic validity of the
provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be
applied to the testacy of Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,
Sanchez and Castro, JJ., concur.

Footnotes
1

He later filed a motion praying that as a legal heir he be included in

this case as one of the oppositors-appellants; to file or adopt the
opposition of his sisters to the project of partition; to submit his brief
after paying his proportionate share in the expenses incurred in the
printing of the record on appeal; or to allow him to adopt the briefs
filed by his sisters but this Court resolved to deny the motion.
2

San Antonio, Texas was his legal residence.

Lim vs. Collector, 36 Phil. 472; In re Testate Estate of Suntay, 95

Phil. 500.

EN BANC
[G.R. No. 94723. August 21, 1997]
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and
Natural Guardian, and Spouses FEDERICO N. SALVACION, JR., and
EVELINA E. SALVACION, petitioners, vs. CENTRAL BANK OF THE
PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI y
NORTHCOTT, respondents.
DECISION
TORRES, JR., J.:
In our predisposition to discover the original intent of a statute, courts
become the unfeeling pillars of the status quo. Little do we realize that
statutes or even constitutions are bundles of compromises thrown our way
by their framers. Unless we exercise vigilance, the statute may already be
out of tune and irrelevant to our day.
The petition is for declaratory relief. It prays for the following reliefs:
a.) Immediately upon the filing of this petition, an Order be issued
restraining the respondents from applying and enforcing Section 113
of Central Bank Circular No. 960;
b.) After hearing, judgment be rendered:
1.) Declaring the respective rights and duties of petitioners
and respondents;
2.) Adjudging Section 113 of Central Bank Circular No. 960
as contrary to the provision of the Constitution, hence void;
because its provision that Foreign currency deposits shall
be exempt from attachment, garnishment, or any other order
to process of any court, legislative body, government agency
or any administrative body whatsoever
i.) has taken away the right of petitioners to have the bank
deposit of defendant Greg Bartelli y Northcott garnished

to satisfy the judgment rendered in petitioners favor in

violation of substantive due process guaranteed by the
Constitution;
ii.) has given foreign currency depositors an undue favor
or a class privilege in violation of the equal protection
clause of the Constitution;
iii.) has provided a safe haven for criminals like the herein
respondent Greg Bartelli y Northcott since criminals could
escape civil liability for their wrongful acts by merely
converting their money to a foreign currency and
depositing it in a foreign currency deposit account with an
authorized bank.
The antecedents facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed
and lured petitioner Karen Salvacion, then 12 years old to go with him to
his apartment. Therein, Greg Bartelli detained Karen Salvacion for four
days, or up to February 7, 1989 and was able to rape the child once on
February 4, and three times each day on February 5, 6, and 7, 1989. On
February 7, 1989, after policemen and people living nearby, rescued
Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail.
The policemen recovered from Bartelli the following items: 1.) Dollar
Check No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.)
COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar
Account China Banking Corp., US $/A#54105028-2; 4.) ID-122-30-8877;
5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed
Doll (Teddy Bear) used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed
against Greg Bartelli, Criminal Case No. 801 for Serious Illegal Detention
and Criminal Cases Nos. 802, 803, 804, and 805 for four (4) counts of
Rape. On the same day, petitioners filed with the Regional Trial Court of
Makati Civil Case No. 89-3214 for damages with preliminary attachment
against Greg Bartelli. On February 24, 1989, the day there was a
scheduled hearing for Bartellis petition for bail the latter escaped from jail.
On February 28, 1989, the court granted the fiscals Urgent Ex-Parte
Motion for the Issuance of Warrant of Arrest and Hold Departure Order.

Pending the arrest of the accused Greg Bartelli y Northcott, the criminal
cases were archived in an Order dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated
February 22, 1989 granting the application of herein petitioners, for the
issuance of the writ of preliminary attachment. After petitioners gave Bond
No. JCL (4) 1981 by FGU Insurance Corporation in the amount
P100,000.00, a Writ of Preliminary Attachment was issued by the trial court
on February 28, 1989.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of
Garnishment on China Banking Corporation. In a letter dated March 13,
1989 to the Deputy Sheriff of Makati, China Banking Corporation invoked
Republic Act No. 1405 as its answer to the notice of garnishment served on
it. On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent
his reply to China Banking Corporation saying that the garnishment did not
violate the secrecy of bank deposits since the disclosure is merely
incidental to a garnishment properly and legally made by virtue of a court
order which has placed the subject deposits in custodia legis. In answer to
this letter of the Deputy Sheriff of Makati, China Banking Corporation, in a
letter dated March 20, 1989, invoked Section 113 of Central Bank Circular
No. 960 to the effect that the dollar deposits of defendant Greg Bartelli are
exempt from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body,
whatsoever.
This prompted the counsel for petitioners to make an inquiry with the
Central Bank in a letter dated April 25, 1989 on whether Section 113 of CB
Circular No. 960 has any exception or whether said section has been
repealed or amended since said section has rendered nugatory the
substantive right of the plaintiff to have the claim sought to be enforced by
the civil action secured by way of the writ of preliminary attachment as
granted to the plaintiff under Rule 57 of the Revised Rules of Court. The
Central Bank responded as follows:
May
1989
Ms. Erlinda S. Carolino
12 Pres. Osmea Avenue

26,

South Admiral Village

Paranaque, Metro Manila
Dear Ms. Carolino:
This is in reply to your letter dated April 25, 1989 regarding your
inquiry on Section 113, CB Circular No. 960 (1983).
The cited provision is absolute in application. It does not admit of
any exception, nor has the same been repealed nor amended.
The purpose of the law is to encourage dollar accounts within the
countrys banking system which would help in the development of
the economy. There is no intention to render futile the basic rights of
a person as was suggested in your subject letter. The law may be
harsh as some perceive it, but it is still the law. Compliance is,
therefore, enjoined.
Very truly yours,
(SGD)
AGAPITO
S.
FAJARDO
Directorlxvi[1]
Meanwhile, on April 10, 1989, the trial court granted petitioners motion for
leave to serve summons by publication in the Civil Case No. 89-3214
entitled Karen Salvacion. et al. vs. Greg Bartelli y Northcott. Summons
with the complaint was published in the Manila Times once a week for
three consecutive weeks. Greg Bartelli failed to file his answer to the
complaint and was declared in default on August 7, 1989. After hearing the
case ex-parte, the court rendered judgment in favor of petitioners on March
29, 1990, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs
and against defendant, ordering the latter:
1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00
as moral damages;
2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr.,
and Evelina E. Salvacion the amount of P150,000.00 each or a total
of P300,000.00 for both of them;

3. To pay plaintiffs exemplary damages of P100,000.00; and

4. To pay attorneys fees in an amount equivalent to 25% of the
total amount of damages herein awarded;
5. To pay litigation expenses of P10,000.00; plus
6. Costs of the suit.
SO ORDERED.
The heinous acts of respondents Greg Bartelli which gave rise to the award
were related in graphic detail by the trial court in its decision as follows:
The defendant in this case was originally detained in the municipal
jail of Makati but was able to escape therefrom on February 24, 1989
as per report of the Jail Warden of Makati to the Presiding Judge,
Honorable Manuel M. Cosico of the Regional Trial Court of Makati,
Branch 136, where he was charged with four counts of Rape and
Serious Illegal Detention (Crim. Cases Nos. 802 to 805).
Accordingly, upon motion of plaintiffs, through counsel, summons
was served upon defendant by publication in the Manila Times, a
newspaper of general circulation as attested by the Advertising
Manager of the Metro Media Times, Inc., the publisher of the said
newspaper. Defendant, however, failed to file his answer to the
complaint despite the lapse of the period of sixty (60) days from the
last publication; hence, upon motion of the plaintiffs through counsel,
defendant was declared in default and plaintiffs were authorized to
present their evidence ex parte.
In support of the complaint, plaintiffs presented as witness the minor
Karen E. Salvacion, her father, Federico N. Salacion, Jr., a certain
Joseph Aguilar and a certain Liberato Mandulio, who gave the
following testimony:
Karen took her first year high school in St. Marys Academy in Pasay City
but has recently transferred to Arellano University for her second year.
In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati
Cinema Square, with her friend Edna Tangile whiling away her free time.
At about 3:30 p.m. while she was finishing her snack on a concrete bench
in front of Plaza Fair, an American approached her. She was then alone

because Edna Tangile had already left, and she was about to go home.
(TSN, Aug. 15, 1989, pp. 2 to 5)
The American asked her name and introduced himself as Greg Bartelli.
He sat beside her when he talked to her. He said he was a Math teacher
and told her that he has a sister who is a nurse in New York. His sister
allegedly has a daughter who is about Karens age and who was with him
in his house along Kalayaan Avenue. (TSN, Aug. 15, 1989, pp. 4-5).
The American asked Karen what was her favorite subject and she told him
its Pilipino. He then invited her to go with him to his house where she
could teach Pilipino to his niece. He even gave her a stuffed toy to
persuade her to teach his niece. (Id., pp.5-6)
They walked from Plaza Fair along Pasong Tamo, turning right to reach
the defendants house along Kalayaan Avenue. (Id., p.6)
When they reached the apartment house, Karen notices that defendants
alleged niece was not outside the house but defendant told her maybe his
niece was inside. When Karen did not see the alleged niece inside the
house, defendant told her maybe his niece was upstairs, and invited Karen
to go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the door. Karen
became nervous because his niece was not there. Defendant got a piece
of cotton cord and tied Karens hands with it, and then he undressed her.
Karen cried for help but defendant strangled her. He took a packing tape
and he covered her mouth with it and he circled it around her head. (Id., p.
7)
Then, defendant suddenly pushed Karen towards the bed which was just
near the door. He tied her feet and hands spread apart to the bed posts.
He knelt in front of her and inserted his finger in her sex organ. She felt
severe pain. She tried to shout but no sound could come out because
there were tapes on her mouth. When defendant withdrew his finger it was
full of blood and Karen felt more pain after the withdrawal of the finger. (Id.,
p.8)
He then got a Johnsons Baby Oil and he applied it to his sex organ as well
as to her sex organ. After that he forced his sex organ into her but he was

not able to do so. While he was doing it, Karen found it difficult to breathe
and she perspired a lot while feeling severe pain. She merely presumed
that he was able to insert his sex organ a little, because she could not see.
Karen could not recall how long the defendant was in that position. (Id., pp.
8-9)
After that, he stood up and went to the bathroom to wash. He also told
Karen to take a shower and he untied her hands. Karen could only hear
the sound of the water while the defendant, she presumed, was in the
bathroom washing his sex organ. When she took a shower more blood
came out from her. In the meantime, defendant changed the mattress
because it was full of blood. After the shower, Karen was allowed by
defendant to sleep. She fell asleep because she got tired crying. The
incident happened at about 4:00 p.m. Karen had no way of determining the
exact time because defendant removed her watch. Defendant did not care
to give her food before she went to sleep. Karen woke up at about 8:00
oclock the following morning. (Id., pp. 9-10)
The following day, February 5, 1989, a Sunday, after breakfast of biscuit
and coke at about 8:30 to 9:00 a.m. defendant raped Karen while she was
still bleeding. For lunch, they also took biscuit and coke. She was raped
for the second time at about 12:00 to 2:00 p.m. In the evening, they had
rice for dinner which defendant had stored downstairs; it was he who
cooked the rice that is why it looks like lugaw. For the third time, Karen
was raped again during the night. During those three times defendant
succeeded in inserting his sex organ but she could not say whether the
organ was inserted wholly.
Karen did not see any firearm or any bladed weapon. The defendant did
not tie her hands and feet nor put a tape on her mouth anymore but she did
not cry for help for fear that she might be killed; besides, all those windows
and doors were closed. And even if she shouted for help, nobody would
hear her. She was so afraid that if somebody would hear her and would be
able to call a police, it was still possible that as she was still inside the
house, defendant might kill her. Besides, the defendant did not leave that
Sunday, ruling out her chance to call for help. At nighttime he slept with
her again. (TSN, Aug. 15, 1989, pp. 12-14)

On February 6, 1989, Monday, Karen was raped three times, once in the
morning for thirty minutes after breakfast of biscuits; again in the afternoon;
and again in the evening. At first, Karen did not know that there was a
window because everything was covered by a carpet, until defendant
opened the window for around fifteen minutes or less to let some air in, and
she found that the window was covered by styrofoam and plywood. After
that, he again closed the window with a hammer and he put the styrofoam,
plywood, and carpet back. (Id., pp. 14-15)
That Monday evening, Karen had a chance to call for help, although
defendant left but kept the door closed. She went to the bathroom and saw
a small window covered by styrofoam and she also spotted a small hole.
She stepped on the bowl and she cried for help through the hole. She
cried: Maawa na po kayo sa akin. Tulungan nyo akong makalabas dito.
Kinidnap ako! Somebody heard her. It was a woman, probably a
neighbor, but she got angry and said she was istorbo. Karen pleaded for
help and the woman told her to sleep and she will call the police. She
finally fell asleep but no policeman came. (TSN, Aug. 15, 1989, pp. 15-16)
She woke up at 6:00 oclock the following morning, and she saw defendant
in bed, this time sleeping. She waited for him to wake up. When he woke
up, he again got some food but he always kept the door locked. As usual,
she was merely fed with biscuit and coke. On that day, February 7, 1989,
she was again raped three times. The first at about 6:30 to 7:00 a.m., the
second at about 8:30 9:00, and the third was after lunch at 12:00 noon.
After he had raped her for the second time he left but only for a short while.
Upon his return, he caught her shouting for help but he did not understand
what she was shouting about. After she was raped the third time, he left
the house. (TSN, Aug. 15, 1989, pp. 16-17) She again went to the
bathroom and shouted for help. After shouting for about five minutes, she
heard many voices. The voices were asking for her name and she gave
her name as Karen Salvacion. After a while, she heard a voice of a woman
saying they will just call the police. They were also telling her to change
her clothes. She went from the bathroom to the room but she did not
change her clothes being afraid that should the neighbors call the police
and the defendant see her in different clothes, he might kill her. At that
time she was wearing a T-shirt of the American bacause the latter washed
her dress. (Id., p. 16)

Afterwards, defendant arrived and opened the door. He asked her if she
had asked for help because there were many policemen outside and she
denied it. He told her to change her clothes, and she did change to the one
she was wearing on Saturday. He instructed her to tell the police that she
left home and willingly; then he went downstairs but he locked the door.
She could hear people conversing but she could not understand what they
were saying. (Id., p. 19)
When she heard the voices of many people who were conversing
downstairs, she knocked repeatedly at the door as hard as she could. She
heard somebody going upstairs and when the door was opened, she saw a
policeman. The policeman asked her name and the reason why she was
there. She told him she was kidnapped. Downstairs, he saw about five
policemen in uniform and the defendant was talking to them. Nakikipagareglo po sa mga pulis, Karen added. The policeman told him to just
explain at the precinct. (Id., p. 20)
They went out of the house and she saw some of her neighbors in front of
the house. They rode the car of a certain person she called Kuya Boy
together with defendant, the policeman, and two of her neighbors whom
she called Kuya Bong Lacson and one Ate Nita. They were brought to
Sub-Station I and there she was investigated by a policeman. At about
2:00 a.m., her father arrived, followed by her mother together with some of
their neighbors. Then they were brought to the second floor of the police
headquarters. (Id., p. 21)
At the headquarters, she was asked several questions by the investigator.
The written statement she gave to the police was marked Exhibit A. Then
they proceeded to the National Bureau of Investigation together with the
investigator and her parents. At the NBI, a doctor, a medico-legal officer,
examined her private parts. It was already 3:00 in early morning, of the
following day when they reached the NBI, (TSN, Aug. 15, 1989, p. 22) The
findings of the medico-legal officer has been marked as Exhibit B.
She was studying at the St. Marys Academy in Pasay City at the time of
the Incident but she subsequently transferred to Apolinario Mabini, Arellano
University, situated along Taft Avenue, because she was ashamed to be
the subject of conversation in the school. She first applied for transfer to
Jose Abad Santos, Arellano University along Taft Avenue near the Light

Rail Transit Station but she was denied admission after she told the school
the true reason for her transfer. The reason for their denial was that they
might be implicated in the case. (TSN, Aug. 15, 1989, p. 46)
xxx

xxx

xxx

After the incident, Karen has changed a lot. She does not play with her
brother and sister anymore, and she is always in a state of shock; she has
been absent-minded and is ashamed even to go out of the house. (TSN,
Sept. 12, 1989, p. 10) She appears to be restless or sad. (Id., p. 11) The
father prays for P500,000.00 moral damages for Karen for this shocking
experience which probably, she would always recall until she reaches old
age, and he is not sure if she could ever recover from this experience.
(TSN, Sept. 24, 1989, pp. 10-11)
Pursuant to an Order granting leave to publish notice of decision, said
notice was published in the Manila Bulletin once a week for three
consecutive weeks. After the lapse of fifteen (15) days from the date of the
last publication of the notice of judgment and the decision of the trial court
had become final, petitioners tried to execute on Bartellis dollar deposit
with China Banking Corporation. Likewise, the bank invoked Section 113
of Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil down to
two:
May this Court entertain the instant petition despite the fact that original
jurisdiction in petitions for declaratory relief rests with the lower court? She
Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426,
as amended by P.D. 1246, otherwise known as the Foreign Currency
Deposit Act be made applicable to a foreign transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank
Circular No. 960 providing that Foreign currency deposits shall be exempt
from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body
whatsoever. should be adjudged as unconstitutional on the grounds that:
1.) it has taken away the right of petitioners to have the bank deposit of

defendant Greg Bartelli y Northcott garnished to satisfy the judgment

rendered in petitioners favor in violation of substantive due process
guaranteed by the Constitution; 2.) it has given foreign currency
depositors an undue favor or a class privilege n violation of the equal
protection clause of the Constitution; 3.) it has provided a safe haven for
criminals like the herein respondent Greg Bartelli y Northcott since criminal
could escape civil liability for their wrongful acts by merely converting their
money to a foreign currency and depositing it in a foreign currency deposit
account with an authorized bank; and 4.) The Monetary Board, in issuing
Section 113 of Central Bank Circular No. 960 has exceeded its delegated
quasi- legislative power when it took away: a.) the plaintiffs substantive
right to have the claim sought to be enforced by the civil action secured by
way of the writ of preliminary attachment as granted by Rule 57 of the
Revised Rules of Court; b.) the plaintiffs substantive right to have the
judgment credit satisfied by way of the writ of execution out of the bank
deposit of the judgment debtor as granted to the judgment creditor by Rule
39 of the Revised Rules of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges that
the Monetary Board in issuing Section 113 of CB Circular No. 960 did not
exceed its power or authority because the subject Section is copied
verbatim from a portion of R.A. No. 6426 as amended by P.D. 1246.
Hence, it was not the Monetary Board that grants exemption from
attachment or garnishment to foreign currency deposits, but the law (R.A.
6426 as amended) itself; that it does not violate the substantive due
process guaranteed by the Constitution because a.) it was based on a
law; b.) the law seems to be reasonable; c.) it is enforced according to
regular methods of procedure; and d.) it applies to all members of a class.
Expanding, the Central Bank said; that one reason for exempting the
foreign currency deposits from attachment, garnishment or any other order
process of any court, is to assure the development and speedy growth of
the Foreign Currency Deposit System and the Offshore Banking System in
the Philippines; that another reason is to encourage the inflow of foreign
currency deposits into the banking institutions thereby placing such
institutions more in a position to properly channel the same to loans and
investments in the Philippines, thus directly contributing to the economic
development of the country; that the subject section is being enforced
according to the regular methods of procedure; and that it applies to all

currency deposits made by any person and therefore does not violate the
equal protection clause of the Constitution.
Respondent Central Bank further avers that the questioned provision is
needed to promote the public interest and the general welfare; that the
State cannot just stand idly by while a considerable segment of the society
suffers from economic distress; that the State had to take some measures
to encourage economic development; and that in so doing persons and
property may be subjected to some kinds of restraints or burdens to secure
the general welfare or public interest. Respondent Central Bank also
alleges that Rule 39 and Rule 57 of the Revised Rules of Court provide that
some properties are exempted from execution/attachment especially
provided by law and R.A. No. 6426 as amended is such a law, in that it
specifically provides, among others, that foreign currency deposits shall be
exempted from attachment, garnishment, or any other order or process of
any court, legislative body, government agency or any administrative body
whatsoever.
For its part, respondent China Banking Corporation, aside from giving
reasons similar to that of respondent Central Bank, also stated that
respondent China Bank is not unmindful of the inhuman sufferings
experienced by the minor Karen E. Salvacion from the beastly hands of
Greg Bartelli; that it is not only too willing to release the dollar deposit of
Bartelli which may perhaps partly mitigate the sufferings petitioner has
undergone; but it is restrained from doing so in view of R.A. No. 6426 and
Section 113 of Central Bank Circular No. 960; and that despite the harsh
effect to these laws on petitioners, CBC has no other alternative but to
follow the same.
This court finds the petition to be partly meritorious.
Petitioner deserves to receive the damages awarded to her by the court.
But this petition for declaratory relief can only be entertained and treated as
a petition for mandamus to require respondents to honor and comply with
the writ of execution in Civil Case No. 89-3214.
The Court has no original and exclusive jurisdiction over a petition for
declatory relief.lxvi[2] However, exceptions to this rule have been recognized.
Thus, where the petition has far-reaching implications and raises questions
that should be resolved, it may be treated as one for mandamus.lxvi[3]

Here is a child, a 12-year old girl, who in her belief that all Americans are
good and in her gesture of kindness by teaching his alleged niece the
Filipino language as requested by the American, trustingly went with said
stranger to his apartment, and there she was raped by said American
tourist Greg Bartelli. Not once, but ten times. She was detained therein for
four (4) days. This American tourist was able to escape from the jail and
avoid punishment. On the other hand, the child, having received a
favorable judgment in the Civil Case for damages in the amount of more
than P1,000,000.00, which amount could alleviate the humiliation, anxiety,
and besmirched reputation she had suffered and may continue to suffer for
a long, long time; and knowing that this person who had wronged her has
the money, could not, however get the award of damages because of this
unreasonable law. This questioned law, therefore makes futile the
favorable judgment and award of damages that she and her parents fully
deserve. As stated by the trial court in its decision,
Indeed, after hearing the testimony of Karen, the Court believes that
it was indoubtedly a shocking and traumatic experience she had
undergone which could haunt her mind for a long, long time, the
mere recall of which could make her feel so humiliated, as in fact she
had been actually humiliated once when she was refused admission
at the Abad Santos High School, Arellano University, where she
sought to transfer from another school, simply because the school
authorities of the said High School learned about what happened to
her and allegedly feared that they might be implicated in the case.
xxx
The reason for imposing exemplary or corrective damages is due to
the wanton and bestial manner defendant had committed the acts of
rape during a period of serious illegal detention of his hapless victim,
the minor Karen Salvacion whose only fault was in her being so
naive and credulous to believe easily that defendant, an American
national, could not have such a bestial desire on her nor capable of
committing such heinous crime. Being only 12 years old when that
unfortunate incident happened, she has never heard of an old
Filipino adage that in every forest there is a snake, xxx. lxvi[4]

If Karens sad fate had happened to anybodys own kin, it would be difficult
for him to fathom how the incentive for foreign currency deposit could be
more important than his childs right to said award of damages; in this case,
the victims claim for damages from this alien who had the gall to wrong a
child of tender years of a country where he is mere visitor. This further
illustrates the flaw in the questioned provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time
when the countrys economy was in a shambles; when foreign investments
were minimal and presumably, this was the reason why said statute was
enacted. But the realities of the present times show that the country has
recovered economically; and even if not, the questioned law still denies
those entitled to due process of law for being unreasonable and
oppressive. The intention of the questioned law may be good when
enacted. The law failed to anticipate the inquitous effects producing
outright injustice and inequality such as as the case before us.
It has thus been said thatBut I also know,lxvi[5] that laws and institutions must go hand in hand
with the progress of the human mind. As that becomes more
developed, more enlightened, as new discoveries are made, new
truths are disclosed and manners and opinions change with the
change of circumstances, institutions must advance also, and keep
pace with the times We might as well require a man to wear still
the coat which fitted him when a boy, as civilized society to remain
ever under the regimen of their barbarous ancestors.
In his comment, the Solicitor General correctly opined, thus:
"The present petition has far-reaching implications on the right of a
national to obtain redress for a wrong committed by an alien who
takes refuge under a law and regulation promulgated for a purpose
which does not contemplate the application thereof envisaged by the
allien. More specifically, the petition raises the question whether the
protection against attachment, garnishment or other court process
accorded to foreign currency deposits PD No. 1246 and CB Circular
No. 960 applies when the deposit does not come from a lender or

investor but from a mere transient who is not expected to maintain

the deposit in the bank for long.
The resolution of this question is important for the protection of
nationals who are victimized in the forum by foreigners who are
merely passing through.
xxx
xxx Respondents China Banking Corporation and Central Bank of
the Philippines refused to honor the writ of execution issued in Civil
Case No. 89-3214 on the strength of the following provision of
Central Bank Circular No. 960:
Sec. 113 Exemption from attachment. Foreign currency
deposits shall be exempt from attachment, garnishment, or
any other order or process of any court, legislative body,
government agency or any administrative body whatsoever.
Central Bank Circular No. 960 was issued pursuant to Section 7 of
Republic Act No. 6426:
Sec. 7. Rules and Regulations. The Monetary Board of the
Central Bank shall promulgate such rules and regulations as
may be necessary to carry out the provisions of this Act
which shall take effect after the publication of such rules and
regulations in the Official Gazette and in a newspaper of
national circulation for at least once a week for three
consecutive weeks. In case the Central Bank promulgates
new rules and regulations decreasing the rights of
depositors, the rules and regulations at the time the deposit
was made shall govern.
The aforecited Section 113 was copied from Section 8 of Republic
Act No. 6426. As amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency Deposits. -- All foreign
currency deposits authorized under this Act, as amended by
Presidential Decree No. 1035, as well as foreign currency
deposits authorized under Presidential Decree No. 1034, are
hereby declared as and considered of an absolutely
confidential nature and, except upon the written permission

of the depositor, in no instance shall such foreign currency

deposits be examined, inquired or looked into by any person,
government official, bureau or office whether judicial or
administrative or legislative or any other entity whether
public or private: Provided, however, that said foreign
currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court,
legislative body, government agency or any administrative
body whatsoever.
The purpose of PD 1246 in according protection against
attachment, garnishment and other court process to foreign currency
deposits is stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426, as amended by
Presidential Decree No. 1035, certain Philippine banking
institutions and branches of foreign banks are authorized to
accept deposits in foreign currency;
WHEREAS, under provisions of Presidential Decree No.
1034 authorizing the establishment of an offshore banking
system in the Philippines, offshore banking units are also
authorized to receive foreign currency deposits in certain
cases;
WHEREAS, in order to assure the development and speedy
growth of the Foreign Currency Deposit System and the
Offshore Banking System in the Philippines, certain
incentives were provided for under the two Systems such as
confidentiality subject to certain exceptions and tax
exemptions on the interest income of depositors who are
nonresidents and are not engaged in trade or business in the
Philippines;
WHEREAS, making absolute the protective cloak of
confidentiality over such foreign currency deposits,
exempting such deposits from tax, and guaranteeing the
vested right of depositors would better encourage the inflow
of foreign currency deposits into the banking institutions
authorized to accept such deposits in the Philippines thereby
placing such institutions more in a position to properly
channel the same to loans and investments in the

Philippines, thus directly contributing to the economic

development of the country;
Thus, one of the principal purposes of the protection accorded to
foreign currency deposits is to assure the development and speedy
growth of the Foreign Currency Deposit system and the Offshore
Banking in the Philippines (3rd Whereas).
The Offshore Banking System was established by PD No. 1034. In
turn, the purposes of PD No. 1034 are as follows:
WHEREAS, conditions conducive to the establishment of an
offshore banking system, such as political stability, a growing
economy and adequate communication facilities, among
others, exist in the Philippines;
WHEREAS, it is in the interest of developing countries to
have as wide access as possible to the sources of capital
funds for economic development;
WHEREAS, an offshore banking system based in the
Philippines will be advantageous and beneficial to the
country by increasing our links with foreign lenders,
facilitating the flow of desired investments into the
Philippines, creating employment opportunities and expertise
in international finance, and contributing to the national
development effort.
WHEREAS, the geographical location, physical and human
resources, and other positive factors provide the Philippines
with the clear potential to develop as another financial center
in Asia;
On the other hand, the Foreign Currency Deposit system was
created by PD No. 1035. Its purpose are as follows:
WHEREAS, the establishment of an offshore banking
system in the Philippines has been authorized under a
separate decree;
WHEREAS, a number of local commercial banks, as
depository bank under the Foreign Currency Deposit Act (RA
No. 6426), have the resources and managerial competence
to more actively engage in foreign exchange transactions

and participate in the grant of foreign currency loans to

resident corporations and firms;
WHEREAS, it is timely to expand the foreign currency
lending authority of the said depository banks under RA
6426 and apply to their transactions the same taxes as
would be applicable to transaction of the proposed offshore
banking units;
It is evident from the above [Whereas clauses] that the Offshore
Banking System and the Foreign Currency Deposit System were
designed to draw deposits from foreign lenders and investors (Vide
second Whereas of PD No. 1034; third Whereas of PD No. 1035). It
is these depositors that are induced by the two laws and given
protection and incentives by them.
Obviously, the foreign currency deposit made by a transient or a
tourist is not the kind of deposit encourage by PD Nos. 1034 and
1035 and given incentives and protection by said laws because such
depositor stays only for a few days in the country and, therefore, will
maintain his deposit in the bank only for a short time.
Respondent Greg Bartelli, as stated, is just a tourist or a transient.
He deposited his dollars with respondent China Banking Corporation
only for safekeeping during his temporary stay in the Philippines.
For the reasons stated above, the Solicitor General thus submits
that the dollar deposit of respondent Greg Bartelli is not entitled to
the protection of Section 113 of Central Bank Circular No. 960 and
PD No. 1246 against attachment, garnishment or other court
processes.lxvi[6]
In fine, the application of the law depends on the extent of its justice.
Eventually, if we rule that the questioned Section 113 of Central Bank
Circular No. 960 which exempts from attachment, garnishment, or any
other order or process of any court. Legislative body, government agency
or any administrative body whatsoever, is applicable to a foreign transient,
injustice would result especially to a citizen aggrieved by a foreign guest
like accused Greg Bartelli. This would negate Article 10 of the New Civil
Code which provides that in case of doubt in the interpretation or
application of laws, it is presumed that the lawmaking body intended right
and justice to prevail. Ninguno non deue enriquecerse tortizerzmente con

damo de otro. Simply stated, when the statute is silent or ambiguous, this
is one of those fundamental solutions that would respond to the vehement
urge of conscience. (Padilla vs. Padilla, 74 Phil. 377)
It would be unthinkable, that the questioned Section 113 of Central Bank
No. 960 would be used as a device by accused Greg Bartelli for
wrongdoing, and in so doing, acquitting the guilty at the expense of the
innocent.
Call it what it may but is there no conflict of legal policy here? Dollar
against Peso? Upholding the final and executory judgment of the lower
court against the Central Bank Circular protecting the foreign depositor?
Shielding or protecting the dollar deposit of a transient alien depositor
against injustice to a national and victim of a crime? This situation calls for
fairness legal tyranny.
We definitely cannot have both ways and rest in the belief that we have
served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960
and PD No. 1246, insofar as it amends Section 8 of R.A. 6426 are hereby
held to be
INAPPLICABLE to this case because of its peculiar
circumstances. Respondents are hereby REQUIRED to COMPLY with the
writ of execution issued in Civil Case No. 89-3214, Karen Salvacion, et al.
vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to
RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y
Northcott in such amount as would satisfy the judgment.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno,
Vitug, Kapunan, Francisco, and Panganiban, JJ., concur.
Padilla, J., no part.
Mendoza, and Hermosisima, Jr., JJ., on leave.